The OrthoPediatrics Corp. (NASDAQ:KIDS) Second-Quarter Results Are Out And Analysts Have Published New Forecasts

Shareholders might have noticed that OrthoPediatrics Corp. (NASDAQ:KIDS) filed its quarterly result this time last week. The early response was not positive, with shares down 7.4% to US$28.28 in the past week. Revenue hit US$53m in line with forecasts, although the company reported a statutory loss per share of US$0.26 that was somewhat smaller than 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.

Check out our latest analysis for OrthoPediatrics

Taking into account the latest results, the most recent consensus for OrthoPediatrics from seven analysts is for revenues of US$201.7m in 2024. If met, it would imply a notable 15% increase on its revenue over the past 12 months. Per-share losses are supposed to see a sharp uptick, reaching US$1.19. Before this earnings announcement, the analysts had been modelling revenues of US$201.5m and losses of US$1.24 per share in 2024. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrade to loss per share forecasts for this year.

There's been no major changes to the consensus price target of US$41.67, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic OrthoPediatrics analyst has a price target of US$50.00 per share, while the most pessimistic values it at US$30.00. 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.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that OrthoPediatrics' rate of growth is expected to accelerate meaningfully, with the forecast 33% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 21% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.2% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect OrthoPediatrics to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. 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.

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.

You should always think about risks though. Case in point, we've spotted 2 warning signs for OrthoPediatrics you should be aware of.

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