OrthoPediatrics Corp. (NASDAQ:KIDS) Just Reported And Analysts Have Been Lifting Their Price Targets

As you might know, OrthoPediatrics Corp. (NASDAQ:KIDS) just kicked off its latest quarterly results with some very strong numbers. Results overall were credible, with revenues arriving 7.0% better than analyst forecasts at US$45m. Higher revenues also resulted in lower statutory losses, which were US$0.34 per share, some 7.0% smaller than the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on OrthoPediatrics after the latest results.

See our latest analysis for OrthoPediatrics

After the latest results, the seven analysts covering OrthoPediatrics are now predicting revenues of US$201.1m in 2024. If met, this would reflect a major 24% improvement in revenue compared to the last 12 months. Losses are forecast to balloon 35% to US$1.24 per share. Before this earnings announcement, the analysts had been modelling revenues of US$195.4m and losses of US$1.18 per share in 2024. So it's pretty clear consensus is mixed on OrthoPediatrics after the new consensus numbers; while the analysts lifted revenue numbers, they also administered a pronounced increase to per-share loss expectations.

It will come as a surprise to learn that the consensus price target rose 7.5% to US$43.00, with the analysts clearly more interested in growing revenue, even as losses intensify. 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. Currently, the most bullish analyst values OrthoPediatrics at US$50.00 per share, while the most bearish prices it at US$38.00. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting OrthoPediatrics' growth to accelerate, with the forecast 34% annualised growth to the end of 2024 ranking favourably alongside historical growth of 20% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.1% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that OrthoPediatrics is expected to grow much faster than its industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at OrthoPediatrics. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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 OrthoPediatrics analysts - 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 4 warning signs for OrthoPediatrics (2 are concerning!) 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.