CA$0.29: That's What Analysts Think Aleafia Health Inc. (TSE:AH) Is Worth After Its Latest Results

Aleafia Health Inc. (TSE:AH) just released its latest full-year report and things are not looking great. It was not a great statutory result, with revenues coming in 23% lower than the analysts predicted. Unsurprisingly, earnings also fell seriously short of forecasts, turning into a per-share loss of CA$0.51. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Aleafia Health

Following the latest results, Aleafia Health's two analysts are now forecasting revenues of CA$91.2m in 2022. This would be a sizeable 153% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 84% to CA$0.08. Before this earnings announcement, the analysts had been modelling revenues of CA$82.7m and losses of CA$0.023 per share in 2022. So there's been quite a change-up of views after the recent consensus updates, with the analysts significantly increasing their revenue forecasts while also expecting losses per share to increase. It looks like the revenue growth will not be achieved without incremental costs.

It will come as no surprise that expanding losses caused the consensus price target to fall 39% to CA$0.29with the analysts implicitly ranking ongoing losses as a greater concern than growing revenues.

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. The analysts are definitely expecting Aleafia Health's growth to accelerate, with the forecast 153% annualised growth to the end of 2022 ranking favourably alongside historical growth of 54% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 15% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Aleafia Health to grow faster than the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Aleafia Health. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Aleafia Health. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Aleafia Health going out as far as 2024, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 5 warning signs for Aleafia Health you should be aware of, and 1 of them is a bit concerning.

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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.