Quipt Home Medical Corp. (TSE:QIPT) Just Released Its First-Quarter Results And Analysts Are Updating Their Estimates

A week ago, Quipt Home Medical Corp. (TSE:QIPT) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. Revenues and losses per share were both better than expected, with revenues of US$67m leading estimates by 2.8%. Statutory losses were smaller than the analystsexpected, coming in at US$0.01 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Quipt Home Medical

Taking into account the latest results, the most recent consensus for Quipt Home Medical from eight analysts is for revenues of US$268.2m in 2024. If met, it would imply a meaningful 14% increase on its revenue over the past 12 months. Quipt Home Medical is also expected to turn profitable, with statutory earnings of US$0.042 per share. Before this earnings announcement, the analysts had been modelling revenues of US$262.7m and losses of US$0.03 per share in 2024. The analysts have definitely been lifting their expectations, with the company expected to reach profitability next year - sooner than expected - thanks to the small lift in revenue expectations.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of CA$13.42, suggesting that the forecast performance does not have a long term impact on the company's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Quipt Home Medical at CA$18.50 per share, while the most bearish prices it at CA$10.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Quipt Home Medical's revenue growth is expected to slow, with the forecast 19% annualised growth rate until the end of 2024 being well below the historical 30% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.6% per year. So it's pretty clear that, while Quipt Home Medical's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that the analysts now expect Quipt Home Medical to become profitable next year, compared to previous expectations that it would report a loss. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Quipt Home Medical. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Quipt Home Medical going out to 2026, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 2 warning signs for Quipt Home Medical 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.