Premier, Inc. Just Beat EPS By 355%: Here's What Analysts Think Will Happen Next

A week ago, Premier, Inc. (NASDAQ:PINC) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. It was overall a positive result, with revenues beating expectations by 6.6% to hit US$248m. Premier also reported a statutory profit of US$0.70, which was an impressive 355% above what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Premier

Taking into account the latest results, the eight analysts covering Premier provided consensus estimates of US$987.4m revenue in 2025, which would reflect a sizeable 26% decline over the past 12 months. Statutory earnings per share are expected to drop 14% to US$1.32 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$977.5m and earnings per share (EPS) of US$0.84 in 2025. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the massive increase in earnings per share expectations following these results.

The consensus price target rose 7.1% to US$20.88, suggesting that higher earnings estimates flow through to the stock's valuation as well. 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. There are some variant perceptions on Premier, with the most bullish analyst valuing it at US$24.00 and the most bearish at US$19.00 per share. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. Over the past five years, revenues have declined around 0.8% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 32% decline in revenue until the end of 2025. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 6.6% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Premier to suffer worse than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Premier's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Premier. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Premier analysts - going out to 2027, and you can see them free on our platform here.

Even so, be aware that Premier is showing 3 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...

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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.