Analysts Are Updating Their National Medical Care Company (TADAWUL:4005) Estimates After Its Second-Quarter Results

Last week, you might have seen that National Medical Care Company (TADAWUL:4005) released its quarterly result to the market. The early response was not positive, with shares down 7.0% to ر.س195 in the past week. Results overall were respectable, with statutory earnings of ر.س5.37 per share roughly in line with what the analysts had forecast. Revenues of ر.س297m came in 4.5% ahead of analyst predictions. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for National Medical Care

After the latest results, the six analysts covering National Medical Care are now predicting revenues of ر.س1.35b in 2024. If met, this would reflect a meaningful 16% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 6.1% to ر.س6.80. Yet prior to the latest earnings, the analysts had been anticipated revenues of ر.س1.31b and earnings per share (EPS) of ر.س6.58 in 2024. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of ر.س222, 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. The most optimistic National Medical Care analyst has a price target of ر.س250 per share, while the most pessimistic values it at ر.س199. 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting National Medical Care's growth to accelerate, with the forecast 34% annualised growth to the end of 2024 ranking favourably alongside historical growth of 9.8% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect National Medical Care to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around National Medical Care's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at ر.س222, 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 National Medical Care. 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 National Medical Care going out to 2026, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for National Medical Care (1 doesn't sit too well with us!) that we have uncovered.

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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.

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