Definitive Healthcare Corp. (NASDAQ:DH) Just Reported Earnings, And Analysts Cut Their Target Price

Investors in Definitive Healthcare Corp. (NASDAQ:DH) had a good week, as its shares rose 5.8% to close at US$2.93 following the release of its quarterly results. Revenues were in line with expectations, at US$60m, while statutory losses ballooned to US$0.14 per share. 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.

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Following the recent earnings report, the consensus from twelve analysts covering Definitive Healthcare is for revenues of US$234.5m in 2026. This implies a small 3.2% decline in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 88% to US$0.21. Before this latest report, the consensus had been expecting revenues of US$240.0m and US$0.17 per share in losses. So it's pretty clear the analysts have mixed opinions on Definitive Healthcare after this update; revenues were downgraded and per-share losses expected to increase.

See our latest analysis for Definitive Healthcare

The consensus price target fell 7.7% to US$4.19, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. 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. The most optimistic Definitive Healthcare analyst has a price target of US$5.00 per share, while the most pessimistic values it at US$3.00. 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.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 2.6% by the end of 2026. This indicates a significant reduction from annual growth of 14% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 11% per year. It's pretty clear that Definitive Healthcare's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Definitive Healthcare's future valuation.

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 forecasts for Definitive Healthcare going out to 2027, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Definitive Healthcare , and understanding it should be part of your investment process.

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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.