Some eHealth, Inc. (NASDAQ:EHTH) Analysts Just Made A Major Cut To Next Year's Estimates

By
Simply Wall St
Published
February 02, 2021
NasdaqGS:EHTH
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The latest analyst coverage could presage a bad day for eHealth, Inc. (NASDAQ:EHTH), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the downgrade, the most recent consensus for eHealth from its ten analysts is for revenues of US$753m in 2021 which, if met, would be a major 27% increase on its sales over the past 12 months. Statutory earnings per share are presumed to step up 16% to US$3.40. Before this latest update, the analysts had been forecasting revenues of US$846m and earnings per share (EPS) of US$4.65 in 2021. Indeed, we can see that the analysts are a lot more bearish about eHealth's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for eHealth

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NasdaqGS:EHTH Earnings and Revenue Growth February 3rd 2021

It'll come as no surprise then, to learn that the analysts have cut their price target 38% to US$78.64. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values eHealth at US$124 per share, while the most bearish prices it at US$47.00. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

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 can infer from the latest estimates that forecasts expect a continuation of eHealth'shistorical trends, as next year's 27% revenue growth is roughly in line with 28% annual revenue growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 4.9% next year. So although eHealth is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of eHealth.

There might be good reason for analyst bearishness towards eHealth, like dilutive stock issuance over the past year. For more information, you can click here to discover this and the 2 other concerns we've identified.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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This article by Simply Wall St is general in nature. 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.
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Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.