The investors in Convey Health Solutions Holdings, Inc.'s (NYSE:CNVY) will be rubbing their hands together with glee today, after the share price leapt 21% to US$6.46 in the week following its full-year results. Revenues were in line with expectations, at US$338m, while statutory losses ballooned to US$0.15 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following the latest results, Convey Health Solutions Holdings' four analysts are now forecasting revenues of US$397.9m in 2022. This would be a decent 18% improvement in sales compared to the last 12 months. Convey Health Solutions Holdings is also expected to turn profitable, with statutory earnings of US$0.33 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$395.9m and earnings per share (EPS) of US$0.31 in 2022. So the consensus seems to have become somewhat more optimistic on Convey Health Solutions Holdings' earnings potential following these results.
The average the analysts price target fell 7.6% to US$12.20, suggesting thatthe analysts have other concerns, and the improved earnings per share outlook was not enough to allay them. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Convey Health Solutions Holdings analyst has a price target of US$14.00 per share, while the most pessimistic values it at US$9.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Convey Health Solutions Holdings shareholders.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Convey Health Solutions Holdings'historical trends, as the 18% annualised revenue growth to the end of 2022 is roughly in line with the 19% annual revenue growth over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 14% per year. So although Convey Health Solutions Holdings is expected to maintain its revenue growth rate, it's definitely expected to grow faster 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 Convey Health Solutions Holdings' earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Convey Health Solutions Holdings analysts - going out to 2024, and you can see them free on our platform here.
Even so, be aware that Convey Health Solutions Holdings is showing 1 warning sign in our investment analysis , you should know about...
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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.