Here's What Analysts Are Forecasting For Enhabit, Inc. (NYSE:EHAB) After Its Annual Results

It's been a pretty great week for Enhabit, Inc. (NYSE:EHAB) shareholders, with its shares surging 17% to US$10.34 in the week since its latest yearly results. The statutory results were mixed overall, with revenues of US$1.0b in line with analyst forecasts, but losses of US$1.61 per share, some 10.0% larger than the analysts were predicting. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Enhabit

After the latest results, the nine analysts covering Enhabit are now predicting revenues of US$1.08b in 2024. If met, this would reflect an okay 3.7% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Enhabit forecast to report a statutory profit of US$0.21 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.07b and earnings per share (EPS) of US$0.19 in 2024. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the substantial gain in earnings per share expectations following these results.

The consensus price target was unchanged at US$10.57, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Enhabit analyst has a price target of US$14.00 per share, while the most pessimistic values it at US$8.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that Enhabit's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 3.7% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 1.7% a year over the past three years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.7% annually for the foreseeable future. Although Enhabit's revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Enhabit following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$10.57, 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 Enhabit. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Enhabit analysts - going out to 2026, and you can see them free on our platform here.

You can also view our analysis of Enhabit's balance sheet, and whether we think Enhabit is carrying too much debt, for free on our platform here.

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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.