The annual results for The Joint Corp. (NASDAQ:JYNT) were released last week, making it a good time to revisit its performance. Joint reported US$48m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.23 beat expectations, being 7.8% higher than what analysts expected. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.
After the latest results, the six analysts covering Joint are now predicting revenues of US$62.0m in 2020. If met, this would reflect a substantial 28% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to leap 32% to US$0.32. Yet prior to the latest earnings, analysts had been forecasting revenues of US$61.6m and earnings per share (EPS) of US$0.30 in 2020. So the consensus seems to have become somewhat more optimistic on Joint's earnings potential following these results.
The consensus price target was unchanged at US$27.67, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Joint analyst has a price target of US$32.00 per share, while the most pessimistic values it at US$25.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Joint's performance in recent years. Next year brings more of the same, according to analysts, with revenue forecast to grow 28%, in line with its 30% 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 it's pretty clear that Joint is forecast to grow substantially faster than its market.
The Bottom Line
The biggest takeaway for us from these new estimates is that the consensus upgraded its earnings per share estimates, showing a clear improvement in sentiment around Joint's earnings potential next year. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that Joint's revenues are expected to grow faster than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Joint analysts - going out to 2022, and you can see them free on our platform here.
We also provide an overview of the Joint Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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