Shareholders might have noticed that DocGo Inc. (NASDAQ:DCGO) filed its third-quarter result this time last week. The early response was not positive, with shares down 2.5% to US$5.94 in the past week. Statutory earnings per share disappointed, coming in -23% short of expectations, at US$0.05. Fortunately revenue performance was a lot stronger at US$187m arriving 16% ahead of predictions. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Check out our latest analysis for DocGo
Taking into account the latest results, the consensus forecast from DocGo's seven analysts is for revenues of US$765.4m in 2024. This reflects a substantial 43% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 457% to US$0.39. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$684.8m and earnings per share (EPS) of US$0.36 in 2024. There has definitely been an improvement in perception after these results, with the analysts noticeably increasing both their earnings and revenue estimates.
Despite these upgrades,the analysts have not made any major changes to their price target of US$12.71, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. The most optimistic DocGo analyst has a price target of US$16.00 per share, while the most pessimistic values it at US$10.00. This is a very narrow spread of estimates, implying either that DocGo is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
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. It's pretty clear that there is an expectation that DocGo's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 33% growth on an annualised basis. This is compared to a historical growth rate of 46% over the past three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.9% annually. So it's pretty clear that, while DocGo's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around DocGo's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is 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.
With that in mind, we wouldn't be too quick to come to a conclusion on DocGo. Long-term earnings power is much more important than next year's profits. We have forecasts for DocGo going out to 2025, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 3 warning signs for DocGo (1 is potentially serious) you should be aware 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.