Last week, you might have seen that Evolent Health, Inc. (NYSE:EVH) released its first-quarter result to the market. The early response was not positive, with shares down 9.7% to US$24.46 in the past week. The results don't look great, especially considering that statutory losses grew 65% toUS$0.22 per share. Revenues of US$640m did beat expectations by 6.8%, but it looks like a bit of a cold comfort. 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 Evolent Health after the latest results.
Taking into account the latest results, the current consensus from Evolent Health's 14 analysts is for revenues of US$2.56b in 2024. This would reflect a meaningful 18% increase on its revenue over the past 12 months. Evolent Health is also expected to turn profitable, with statutory earnings of US$0.23 per share. In the lead-up to this report, the analysts had been modelling revenues of US$2.47b and earnings per share (EPS) of US$0.023 in 2024. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a sizeable expansion in earnings per share in particular.
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$43.29, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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 Evolent Health analyst has a price target of US$63.00 per share, while the most pessimistic values it at US$34.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Evolent Health'shistorical trends, as the 24% annualised revenue growth to the end of 2024 is roughly in line with the 22% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 11% per year. So it's pretty clear that Evolent Health is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Evolent Health following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at US$43.29, with the latest estimates not enough to have an impact on their price targets.
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 Evolent Health 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 1 warning sign for Evolent Health that we have uncovered.
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