LifeStance Health Group, Inc. (NASDAQ:LFST) Just Reported And Analysts Have Been Lifting Their Price Targets
The investors in LifeStance Health Group, Inc.'s (NASDAQ:LFST) will be rubbing their hands together with glee today, after the share price leapt 25% to US$7.79 in the week following its yearly results. The statutory results were mixed overall, with revenues of US$1.1b in line with analyst forecasts, but losses of US$0.51 per share, some 6.5% larger than the analysts were predicting. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for LifeStance Health Group
After the latest results, the seven analysts covering LifeStance Health Group are now predicting revenues of US$1.21b in 2024. If met, this would reflect a notable 15% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 41% to US$0.29. Before this latest report, the consensus had been expecting revenues of US$1.20b and US$0.29 per share in losses. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrade to loss per share forecasts for this year.
These new estimates led to the consensus price target rising 10% to US$8.50, with lower forecast losses suggesting things could be looking up for LifeStance Health Group. 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 LifeStance Health Group, with the most bullish analyst valuing it at US$10.00 and the most bearish at US$8.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
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 LifeStance Health Group's revenue growth is expected to slow, with the forecast 15% annualised growth rate until the end of 2024 being well below the historical 29% p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.8% per year. Even after the forecast slowdown in growth, it seems obvious that LifeStance Health Group is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on LifeStance Health Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple LifeStance Health Group analysts - going out to 2026, and you can see them free on our platform here.
Before you take the next step you should know about the 2 warning signs for LifeStance Health Group that we have uncovered.
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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.
