Earnings Miss: RadNet, Inc. Missed EPS By 65% And Analysts Are Revising Their Forecasts

Shareholders might have noticed that RadNet, Inc. (NASDAQ:RDNT) filed its third-quarter result this time last week. The early response was not positive, with shares down 6.9% to US$73.46 in the past week. Revenue of US$523m surpassed estimates by 5.8%, although statutory earnings per share missed badly, coming in 65% below expectations at US$0.07 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Following the latest results, RadNet's six analysts are now forecasting revenues of US$2.18b in 2026. This would be a meaningful 10% improvement in revenue compared to the last 12 months. RadNet is also expected to turn profitable, with statutory earnings of US$1.13 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.13b and earnings per share (EPS) of US$0.72 in 2026. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a massive increase in earnings per share in particular.

Check out our latest analysis for RadNet

It will come as no surprise to learn that the analysts have increased their price target for RadNet 7.6% to US$86.67on the back of these upgrades. 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 RadNet, with the most bullish analyst valuing it at US$98.00 and the most bearish at US$75.00 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the RadNet's past performance and to peers in the same industry. We would highlight that RadNet's revenue growth is expected to slow, with the forecast 8.3% annualised growth rate until the end of 2026 being well below the historical 11% 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 5.4% annually. So it's pretty clear that, while RadNet's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around RadNet's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster 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.

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 forecasts for RadNet going out to 2027, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with RadNet .

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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.