U.S. markets close in 2 hours 49 minutes
  • S&P 500

    3,896.90
    -4.92 (-0.13%)
     
  • Dow 30

    31,567.74
    +32.23 (+0.10%)
     
  • Nasdaq

    13,494.47
    -94.36 (-0.69%)
     
  • Russell 2000

    2,247.19
    -28.13 (-1.24%)
     
  • Crude Oil

    60.90
    +0.26 (+0.43%)
     
  • Gold

    1,735.00
    +12.00 (+0.70%)
     
  • Silver

    26.80
    +0.12 (+0.46%)
     
  • EUR/USD

    1.2092
    +0.0032 (+0.27%)
     
  • 10-Yr Bond

    1.4140
    -0.0320 (-2.21%)
     
  • GBP/USD

    1.3972
    +0.0052 (+0.37%)
     
  • USD/JPY

    106.7300
    0.0000 (0.00%)
     
  • BTC-USD

    47,855.46
    -1,192.27 (-2.43%)
     
  • CMC Crypto 200

    959.58
    -27.07 (-2.74%)
     
  • FTSE 100

    6,613.75
    +25.22 (+0.38%)
     
  • Nikkei 225

    29,408.17
    -255.33 (-0.86%)
     

eHealth, Inc. (NASDAQ:EHTH) Just Reported And Analysts Have Been Cutting Their Estimates

  • Oops!
    Something went wrong.
    Please try again later.
Simply Wall St
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.

Investors in eHealth, Inc. (NASDAQ:EHTH) had a good week, as its shares rose 5.2% to close at US$57.68 following the release of its yearly results. Results were roughly in line with estimates, with revenues of US$583m and statutory earnings per share of US$1.68. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for eHealth

earnings-and-revenue-growth
earnings-and-revenue-growth

Taking into account the latest results, the most recent consensus for eHealth from eleven analysts is for revenues of US$688.8m in 2021 which, if met, would be a meaningful 18% increase on its sales over the past 12 months. Statutory earnings per share are predicted to leap 25% to US$2.18. Before this earnings report, the analysts had been forecasting revenues of US$752.6m and earnings per share (EPS) of US$2.70 in 2021. The analysts seem less optimistic after the recent results, reducing their sales forecasts and making a real cut to earnings per share numbers.

It'll come as no surprise then, to learn that the analysts have cut their price target 15% to US$67.18. 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. There are some variant perceptions on eHealth, with the most bullish analyst valuing it at US$100.00 and the most bearish at US$47.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. We would highlight that eHealth's revenue growth is expected to slow, with forecast 18% increase next year well below the historical 30%p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.3% next year. So it's pretty clear that, while eHealth's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded their revenue estimates, although industry data suggests that eHealth's revenues are expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on eHealth. Long-term earnings power is much more important than next year's profits. We have forecasts for eHealth going out to 2025, and you can see them free on our platform here.

You still need to take note of risks, for example - eHealth has 4 warning signs (and 1 which can't be ignored) we think you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.