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Cross Country Healthcare, Inc. (NASDAQ:CCRN) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance. Investors have been pretty optimistic on Cross Country Healthcare too, with the stock up 19% to US$16.11 over the past week. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.
After this upgrade, Cross Country Healthcare's eight analysts are now forecasting revenues of US$1.1b in 2021. This would be a decent 18% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to shoot up 398% to US$1.18. Prior to this update, the analysts had been forecasting revenues of US$952m and earnings per share (EPS) of US$0.70 in 2021. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 12% to US$14.42 per share. 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 Cross Country Healthcare analyst has a price target of US$15.00 per share, while the most pessimistic values it at US$10.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Cross Country Healthcare's rate of growth is expected to accelerate meaningfully, with the forecast 25% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 1.1% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.0% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Cross Country Healthcare to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Cross Country Healthcare.
Analysts are definitely bullish on Cross Country Healthcare, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including a weak balance sheet. You can learn more, and discover the 3 other flags we've identified, for free on our platform here.
This article by Simply Wall St is general in nature. 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.
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