Earnings Update: The Ensign Group, Inc. (NASDAQ:ENSG) Just Reported Its First-Quarter Results And Analysts Are Updating Their Forecasts

As you might know, The Ensign Group, Inc. (NASDAQ:ENSG) recently reported its quarterly numbers. Ensign Group reported US$1.0b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$1.19 beat expectations, being 3.5% higher than what the analysts expected. 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 Ensign Group

Following the latest results, Ensign Group's four analysts are now forecasting revenues of US$4.15b in 2024. This would be a modest 7.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 28% to US$4.94. In the lead-up to this report, the analysts had been modelling revenues of US$4.15b and earnings per share (EPS) of US$5.20 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

The consensus price target held steady at US$135, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Ensign Group analyst has a price target of US$135 per share, while the most pessimistic values it at US$133. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Ensign Group's past performance and to peers in the same industry. We would highlight that Ensign Group's revenue growth is expected to slow, with the forecast 11% annualised growth rate until the end of 2024 being well below the historical 15% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.7% annually. Even after the forecast slowdown in growth, it seems obvious that Ensign Group is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Ensign Group analysts - going out to 2026, and you can see them free on our platform here.

You can also see our analysis of Ensign Group's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.