Max Healthcare Institute Limited (NSE:MAXHEALTH) Fell Short of Analyst Expectations: Here's What You Need To Know

It's shaping up to be a tough period for Max Healthcare Institute Limited (NSE:MAXHEALTH), which a week ago released some disappointing annual results that could have a notable impact on how the market views the stock. Earnings missed expectations fairly severely, with revenues arriving 21% shy of expectations at just ₹54b. Per-share statutory earnings were ₹10.84, missing analyst predictions by 20%. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Max Healthcare Institute

Taking into account the latest results, the consensus forecast from Max Healthcare Institute's 18 analysts is for revenues of ₹81.2b in 2025. This reflects a sizeable 50% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 46% to ₹15.89. Before this earnings report, the analysts had been forecasting revenues of ₹83.5b and earnings per share (EPS) of ₹16.10 in 2025. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

The average price target was steady at ₹855even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Max Healthcare Institute, with the most bullish analyst valuing it at ₹950 and the most bearish at ₹465 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Max Healthcare Institute shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Max Healthcare Institute's growth to accelerate, with the forecast 50% annualised growth to the end of 2025 ranking favourably alongside historical growth of 27% 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 15% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Max Healthcare Institute to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also downgraded Max Healthcare Institute's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Still, earnings are more important to the intrinsic value of the business. 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Max Healthcare Institute going out to 2027, and you can see them free on our platform here..

You can also view our analysis of Max Healthcare Institute's balance sheet, and whether we think Max Healthcare Institute is carrying too much debt, for free on our platform here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.