Definitive Healthcare Corp. (NASDAQ:DH) First-Quarter Results Just Came Out: Here's What Analysts Are Forecasting For This Year

Definitive Healthcare Corp. (NASDAQ:DH) shareholders are probably feeling a little disappointed, since its shares fell 4.6% to US$10.21 in the week after its latest first-quarter results. The results don't look great, especially considering that statutory losses grew 17% toUS$0.11 per share. Revenues of US$59,201,000 did beat expectations by 2.3%, but it looks like a bit of a cold comfort. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Definitive Healthcare

Taking into account the latest results, the current consensus from Definitive Healthcare's 13 analysts is for revenues of US$252.7m in 2023, which would reflect a decent 9.0% increase on its sales over the past 12 months. Losses are forecast to balloon 306% to US$0.34 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$252.8m and losses of US$0.32 per share in 2023. So it's pretty clear consensus is mixed on Definitive Healthcare after the new consensus numbers; while the analysts held their revenue numbers steady, they also administered a pronounced increase to per-share loss expectations.

The consensus price target held steady at US$14.08, seemingly implying that the higher forecast losses are not expected to 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. Currently, the most bullish analyst values Definitive Healthcare at US$17.00 per share, while the most bearish prices it at US$11.00. 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 Definitive Healthcare shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Definitive Healthcare's revenue growth is expected to slow, with the forecast 12% annualised growth rate until the end of 2023 being well below the historical 29% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% annually. So it's pretty clear that, while Definitive Healthcare's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at US$14.08, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Definitive Healthcare going out to 2025, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Definitive Healthcare (1 makes us a bit uncomfortable!) that you should be aware of.

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.