Last week, you might have seen that Amedisys, Inc. (NASDAQ:AMED) released its full-year result to the market. The early response was not positive, with shares down 2.5% to US$194 in the past week. Revenues of US$2.0b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$3.84, missing estimates by 3.7%. Earnings are an important time for investors, as they can track a company's performance, look at what top 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 analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus from Amedisys's eleven analysts is for revenues of US$2.14b in 2020, which would reflect a decent 9.3% increase on its sales over the past 12 months. Statutory earnings per share are expected to leap 26% to US$4.95. Yet prior to the latest earnings, analysts had been forecasting revenues of US$2.12b and earnings per share (EPS) of US$4.92 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The consensus price target rose 11% to US$205 despite there being no meaningful change to earnings estimates. It could be that analysts are reflecting the predictability of Amedisys's earnings by assigning a price premium. 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. The most optimistic Amedisys analyst has a price target of US$223 per share, while the most pessimistic values it at US$154. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Amedisys shareholders.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the Amedisys's past performance and to peers in the same market. Next year brings more of the same, according to analysts, with revenue forecast to grow 9.3%, in line with its 9.7% annual growth over the past five years. Compare this with the wider market, which analyst estimates (in aggregate) suggest will see revenues grow 6.7% next year. So although Amedisys is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider market.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. There was also a nice increase in the price target, with analysts feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Amedisys analysts - going out to 2022, and you can see them free on our platform here.
You can also view our analysis of Amedisys's balance sheet, and whether we think Amedisys is carrying too much debt, for free on our platform here.
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