Earnings Beat: BrightSpring Health Services, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

BrightSpring Health Services, Inc. (NASDAQ:BTSG) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 4.9% to hit US$2.9b. BrightSpring Health Services also reported a statutory profit of US$0.14, which was an impressive 84% above what the analysts had forecast. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

We've discovered 2 warning signs about BrightSpring Health Services. View them for free.

Taking into account the latest results, the most recent consensus for BrightSpring Health Services from 13 analysts is for revenues of US$12.1b in 2025. If met, it would imply a reasonable 2.4% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to shoot up 159% to US$0.70. Before this earnings report, the analysts had been forecasting revenues of US$12.0b and earnings per share (EPS) of US$0.48 in 2025. Although the revenue estimates have not really changed, we can see there's been a great increase in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

See our latest analysis for BrightSpring Health Services

There's been no major changes to the consensus price target of US$25.32, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on BrightSpring Health Services, with the most bullish analyst valuing it at US$31.00 and the most bearish at US$20.00 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 BrightSpring Health Services shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that BrightSpring Health Services' revenue growth is expected to slow, with the forecast 3.2% annualised growth rate until the end of 2025 being well below the historical 17% p.a. growth over the last three years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.9% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than BrightSpring Health Services.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around BrightSpring Health Services' earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$25.32, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple BrightSpring Health Services analysts - going out to 2027, 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 BrightSpring Health Services (1 shouldn't be ignored!) that you need to be mindful 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.