Here's What Analysts Are Forecasting For WELL Health Technologies Corp. (TSE:WELL) After Its Yearly Results

WELL Health Technologies Corp. (TSE:WELL) shareholders are probably feeling a little disappointed, since its shares fell 3.4% to CA$8.01 in the week after its latest yearly results. Revenues of CA$50m arrived in line with expectations, although statutory losses per share were CA$0.03, an impressive 64% smaller than what broker models predicted. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for WELL Health Technologies

After the latest results, the nine analysts covering WELL Health Technologies are now predicting revenues of CA$218.8m in 2021. If met, this would reflect a major 335% improvement in sales compared to the last 12 months. Earnings are expected to improve, with WELL Health Technologies forecast to report a statutory profit of CA$0.0029 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$220.7m and earnings per share (EPS) of CA$0.055 in 2021. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.

It might be a surprise to learn that the consensus price target was broadly unchanged at CA$11.88, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values WELL Health Technologies at CA$13.50 per share, while the most bearish prices it at CA$10.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the WELL Health Technologies' past performance and to peers in the same industry. The analysts are definitely expecting WELL Health Technologies' growth to accelerate, with the forecast 3x annualised growth to the end of 2021 ranking favourably alongside historical growth of 74% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 19% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that WELL Health Technologies is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for WELL Health Technologies. 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 CA$11.88, 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 estimates - from multiple WELL Health Technologies analysts - going out to 2022, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for WELL Health Technologies that you need to be mindful of.

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