Shareholders in Centric Health Corporation (TSE:CHH) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts have sharply increased their revenue numbers, with a view that Centric Health will make substantially more sales than they'd previously expected.
After this upgrade, Centric Health's dual analysts are now forecasting revenues of CA$172m in 2020. This would be a sizeable 38% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of CA$138m in 2020. The consensus has definitely become more optimistic, showing a considerable lift to revenue forecasts.
The consensus price target rose 27% to CA$0.35, with the analysts clearly more optimistic about Centric Health's prospects following this update. 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 Centric Health, with the most bullish analyst valuing it at CA$0.45 and the most bearish at CA$0.25 per share. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Centric Health's rate of growth is expected to accelerate meaningfully, with the forecast 38% revenue growth noticeably faster than its historical growth of 0.6% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 2.2% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Centric Health is expected to grow much faster than its industry.
The Bottom Line
The highlight for us was that analysts increased their revenue forecasts for Centric Health this year. Analysts also expect revenues to grow faster than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Centric Health.
But wait - there's more! At least one of Centric Health's dual analysts has provided estimates out to 2023, which can be seen for free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.