Investors in LifeStance Health Group, Inc. (NASDAQ:LFST) had a good week, as its shares rose 3.0% to close at US$6.86 following the release of its first-quarter results. It looks like the results were pretty good overall. While revenues of US$300m were in line with analyst predictions, statutory losses were much smaller than expected, with LifeStance Health Group losing US$0.06 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on LifeStance Health Group after the latest results.

View our latest analysis for LifeStance Health Group

Taking into account the latest results, the consensus forecast from LifeStance Health Group's eight analysts is for revenues of US$1.22b in 2024. This reflects a meaningful 10% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 47% to US$0.24. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$1.22b and losses of US$0.28 per share in 2024. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a cut to losses per share in particular.

The average price target rose 12% to US$8.79, with the analysts signalling that the forecast reduction in losses would be a positive for the stock's valuation. 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. There are some variant perceptions on LifeStance Health Group, with the most bullish analyst valuing it at US$10.00 and the most bearish at US$8.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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 LifeStance Health Group's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 14% growth on an annualised basis. This is compared to a historical growth rate of 26% over the past three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.6% per year. So it's pretty clear that, while LifeStance Health Group's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. 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. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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 LifeStance Health Group going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for LifeStance Health Group that we have uncovered.

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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.