Analyst Estimates: Here's What Brokers Think Of Cano Health, Inc. (NYSE:CANO) After Its First-Quarter Report

As you might know, Cano Health, Inc. (NYSE:CANO) just kicked off its latest first-quarter results with some very strong numbers. Revenues and losses per share were both better than expected, with revenues of US$867m leading estimates by 4.9%. Statutory losses were smaller than the analystsexpected, coming in at US$0.12 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.

View our latest analysis for Cano Health

Following the latest results, Cano Health's eight analysts are now forecasting revenues of US$3.24b in 2023. This would be a decent 12% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 59% to US$0.36. Before this earnings announcement, the analysts had been modelling revenues of US$3.19b and losses of US$0.45 per share in 2023. Although the revenue estimates have not really changed Cano Health'sfuture looks a little different to the past, with a notable improvement in the loss per share forecasts in particular.

The average price target held steady at US$2.78, seeming to indicate that business is performing in line with expectations. 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. Currently, the most bullish analyst values Cano Health at US$7.00 per share, while the most bearish prices it at US$0.50. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

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. We would highlight that Cano Health's revenue growth is expected to slow, with the forecast 16% annualised growth rate until the end of 2023 being well below the historical 55% p.a. growth over the last three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.6% annually. So it's pretty clear that, while Cano Health's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$2.78, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Cano Health. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Cano Health going out to 2025, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 4 warning signs for Cano Health (2 are potentially serious!) that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.