Some P3 Health Partners Inc. (NASDAQ:PIII) Analysts Just Made A Major Cut To Next Year's Estimates

One thing we could say about the analysts on P3 Health Partners Inc. (NASDAQ:PIII) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the downgrade, the latest consensus from P3 Health Partners' four analysts is for revenues of US$1.5b in 2025, which would reflect a reasonable 3.0% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 38% to US$0.39. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$1.7b and losses of US$0.21 per share in 2025. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

See our latest analysis for P3 Health Partners

The consensus price target fell 63% to US$1.00, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

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 pretty clear that there is an expectation that P3 Health Partners' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 2.4% growth on an annualised basis. This is compared to a historical growth rate of 31% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.6% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than P3 Health Partners.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses next year, suggesting all may not be well at P3 Health Partners. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of P3 Health Partners.

That said, the analysts might have good reason to be negative on P3 Health Partners, given dilutive stock issuance over the past year. For more information, you can click here to discover this and the 4 other flags we've identified.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.