Medical Facilities Corporation Just Reported A Surprise Loss: Here's What Analysts Think Will Happen Next

Medical Facilities Corporation (TSE:DR) came out with its third-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Things were not great overall, with a surprise (statutory) loss of US$0.01 per share on revenues of US$105m, even though the analysts had been expecting a profit. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Medical Facilities

After the latest results, the consensus from Medical Facilities' twin analysts is for revenues of US$426.2m in 2024, which would reflect a perceptible 3.3% decline in revenue compared to the last year of performance. Statutory earnings per share are predicted to soar 246% to US$0.74. In the lead-up to this report, the analysts had been modelling revenues of US$440.1m and earnings per share (EPS) of US$0.63 in 2024. Although the analysts have lowered their revenue forecasts, they've also made a solid gain to their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.

The consensus has made no major changes to the price target of CA$10.13, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 2.6% by the end of 2024. This indicates a significant reduction from annual growth of 2.5% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.1% per year. It's pretty clear that Medical Facilities' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Medical Facilities following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Still, earnings per share are more important to value creation for shareholders. The consensus price target held steady at CA$10.13, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Medical Facilities going out as far as 2024, and you can see them free on our platform here.

Plus, you should also learn about the 4 warning signs we've spotted with Medical Facilities .

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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.