Here's What Analysts Are Forecasting For Oncoclínicas do Brasil Serviços Médicos S.A. (BVMF:ONCO3) After Its Second-Quarter Results

Last week, you might have seen that Oncoclínicas do Brasil Serviços Médicos S.A. (BVMF:ONCO3) released its second-quarter result to the market. The early response was not positive, with shares down 7.4% to R$6.30 in the past week. The result was fairly weak overall, with revenues of R$1.6b being 2.9% less than what the analysts had been modelling. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Oncoclínicas do Brasil Serviços Médicos

Taking into account the latest results, the consensus forecast from Oncoclínicas do Brasil Serviços Médicos' nine analysts is for revenues of R$6.54b in 2024. This reflects a solid 12% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to ascend 11% to R$0.33. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$6.50b and earnings per share (EPS) of R$0.41 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a substantial drop in EPS estimates.

It might be a surprise to learn that the consensus price target was broadly unchanged at R$11.40, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Oncoclínicas do Brasil Serviços Médicos at R$18.60 per share, while the most bearish prices it at R$7.50. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Oncoclínicas do Brasil Serviços Médicos' revenue growth is expected to slow, with the forecast 24% annualised growth rate until the end of 2024 being well below the historical 32% p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 9.6% per year. Even after the forecast slowdown in growth, it seems obvious that Oncoclínicas do Brasil Serviços Médicos is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at R$11.40, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Oncoclínicas do Brasil Serviços Médicos. Long-term earnings power is much more important than next year's profits. We have forecasts for Oncoclínicas do Brasil Serviços Médicos going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Oncoclínicas do Brasil Serviços Médicos (2 are potentially serious) you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.