Performant Financial Corporation (NASDAQ:PFMT) Just Reported Earnings, And Analysts Cut Their Target Price
Shareholders might have noticed that Performant Financial Corporation (NASDAQ:PFMT) filed its annual result this time last week. The early response was not positive, with shares down 3.0% to US$2.91 in the past week. Revenue hit US$114m in line with forecasts, although the company reported a statutory loss per share of US$0.10 that was somewhat smaller than the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. 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 Performant Financial
Taking into account the latest results, the consensus forecast from Performant Financial's dual analysts is for revenues of US$126.1m in 2024. This reflects a notable 11% improvement in revenue compared to the last 12 months. The loss per share is expected to ameliorate slightly, reducing to US$0.095. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$127.1m and losses of US$0.06 per share in 2024. So it's pretty clear the analysts have mixed opinions on Performant Financial even after this update; although they reconfirmed their revenue numbers, it came at the cost of a massive increase in per-share losses.
With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 9.1% to US$7.50, with the analysts signalling that growing losses would be a definite concern.
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. One thing stands out from these estimates, which is that Performant Financial is forecast to grow faster in the future than it has in the past, with revenues expected to display 11% annualised growth until the end of 2024. If achieved, this would be a much better result than the 7.9% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 6.7% per year. So it looks like Performant Financial is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to take away is that the analysts increased 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. 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 Performant Financial. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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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.
