Spire Healthcare Group plc (LON:SPI) Annual Results Just Came Out: Here's What Analysts Are Forecasting For This Year

As you might know, Spire Healthcare Group plc (LON:SPI) just kicked off its latest yearly results with some very strong numbers. Spire Healthcare Group beat expectations with revenues of UK£920m arriving 7.7% ahead of forecasts. The company also reported a statutory loss of UK£0.58, 4.8% smaller than was expected. 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 Spire Healthcare Group

Taking into account the latest results, the current consensus from Spire Healthcare Group's eight analysts is for revenues of UK£1.02b in 2021, which would reflect a solid 11% increase on its sales over the past 12 months. Spire Healthcare Group is also expected to turn profitable, with statutory earnings of UK£0.032 per share. Before this earnings report, the analysts had been forecasting revenues of UK£1.04b and earnings per share (EPS) of UK£0.032 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at UK£1.55, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Spire Healthcare Group at UK£1.84 per share, while the most bearish prices it at UK£1.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Spire Healthcare Group's past performance and to peers in the same industry. The analysts are definitely expecting Spire Healthcare Group's growth to accelerate, with the forecast 11% annualised growth to the end of 2021 ranking favourably alongside historical growth of 0.6% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.1% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Spire Healthcare Group is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Spire Healthcare Group's earnings potential next year. 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 UK£1.55, 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 Spire Healthcare Group. Long-term earnings power is much more important than next year's profits. We have forecasts for Spire Healthcare Group going out to 2025, and you can see them free on our platform here.

It might also be worth considering whether Spire Healthcare Group's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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