InnovAge Holding Corp. (NASDAQ:INNV) shareholders are probably feeling a little disappointed, since its shares fell 2.2% to US$5.45 in the week after its latest first-quarter results. Revenues of US$182m beat expectations by a respectable 2.3%, although statutory losses per share increased. InnovAge Holding lost US$0.08, which was 117% more than what the analysts had included in their models. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for InnovAge Holding
After the latest results, the four analysts covering InnovAge Holding are now predicting revenues of US$760.7m in 2024. If met, this would reflect a meaningful 8.8% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 74% to US$0.072. Before this latest report, the consensus had been expecting revenues of US$750.6m and US$0.064 per share in losses. While this year's revenue estimates held steady, there was also a noticeable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
The consensus price target fell 8.3% to US$7.33per share, with the analysts clearly concerned by ballooning losses. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values InnovAge Holding at US$8.00 per share, while the most bearish prices it at US$7.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
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. The analysts are definitely expecting InnovAge Holding's growth to accelerate, with the forecast 12% annualised growth to the end of 2024 ranking favourably alongside historical growth of 5.3% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.9% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that InnovAge Holding is expected to grow much faster than its industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at InnovAge Holding. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is 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.
With that in mind, we wouldn't be too quick to come to a conclusion on InnovAge Holding. Long-term earnings power is much more important than next year's profits. We have forecasts for InnovAge Holding going out to 2026, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for InnovAge Holding that 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.