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As you might know, Health Catalyst, Inc. (NASDAQ:HCAT) just kicked off its latest quarterly results with some very strong numbers. Results overall were solid, with revenues arriving 3.1% better than analyst forecasts at US$68m. Higher revenues also resulted in substantially lower statutory losses which, at US$0.42 per share, were 3.1% smaller than the analysts expected. 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.
After the latest results, the 15 analysts covering Health Catalyst are now predicting revenues of US$290.8m in 2022. If met, this would reflect a major 20% improvement in sales compared to the last 12 months. Losses are expected to be contained, narrowing 19% from last year to US$2.29. Before this latest report, the consensus had been expecting revenues of US$290.7m and US$2.42 per share in losses. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers were unchanged.
Even with the lower forecast losses, the analysts lowered their valuations, with the average price target falling 28% to US$29.00. It looks likethe analysts have become less optimistic about the overall business. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Health Catalyst at US$60.00 per share, while the most bearish prices it at US$17.00. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Health Catalyst's growth to accelerate, with the forecast 28% annualised growth to the end of 2022 ranking favourably alongside historical growth of 22% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 13% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Health Catalyst is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Health Catalyst's future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Health Catalyst going out to 2024, and you can see them free on our platform here.
You still need to take note of risks, for example - Health Catalyst has 3 warning signs we think you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.