GoHealth, Inc. (NASDAQ:GOCO) Just Reported First-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

Shareholders will be ecstatic, with their stake up 44% over the past week following GoHealth, Inc.'s (NASDAQ:GOCO) latest first-quarter results. Results look to have been somewhat negative - revenue fell 5.7% short of analyst estimates at US$183m, although statutory losses were somewhat better. The per-share loss was US$1.12, 36% smaller than the analysts were expecting prior to the result. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for GoHealth

After the latest results, the four analysts covering GoHealth are now predicting revenues of US$785.3m in 2023. If met, this would reflect a sizeable 44% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 77% to US$3.74. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$784.7m and losses of US$5.19 per share in 2023. Although the revenue estimates have not really changed GoHealth'sfuture looks a little different to the past, with a very favorable reduction to the loss per share forecasts in particular.

The average price target held steady at US$11.17, seeming to indicate that business is performing in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values GoHealth at US$14.00 per share, while the most bearish prices it at US$8.50. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting GoHealth's growth to accelerate, with the forecast 63% annualised growth to the end of 2023 ranking favourably alongside historical growth of 4.2% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.9% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that GoHealth is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 GoHealth going out to 2024, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for GoHealth (1 is a bit concerning!) that you need to be mindful of.

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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.