Oceania Healthcare Limited (NZSE:OCA) came out with its yearly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Things were not great overall, with a surprise (statutory) loss of NZ$0.022 per share on revenues of NZ$196m, even though the analysts had been expecting a profit. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following the latest results, Oceania Healthcare's three analysts are now forecasting revenues of NZ$225.5m in 2021. This would be a meaningful 15% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 71% to NZ$0.0064. Before this latest report, the consensus had been expecting revenues of NZ$211.7m and NZ$0.016 per share in losses. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a loss per share in particular.
Despite these upgrades,the analysts have not made any major changes to their price target of NZ$1.09, implying that their latest estimates don't have a long term impact on what they think the stock is worth. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Oceania Healthcare at NZ$1.10 per share, while the most bearish prices it at NZ$1.08. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
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 clear from the latest estimates that Oceania Healthcare's rate of growth is expected to accelerate meaningfully, with the forecast 15% revenue growth noticeably faster than its historical growth of 3.0%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.9% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Oceania Healthcare to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at NZ$1.09, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Oceania Healthcare going out to 2023, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Oceania Healthcare , and understanding them should be part of your investment process.
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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