Last week saw the newest third-quarter earnings release from Phreesia, Inc. (NYSE:PHR), an important milestone in the company's journey to build a stronger business. Results overall weren't great; even though revenues of US$33m beat expectations by 11%, losses ballooned to US$0.07 per share, substantially worse than analysts had 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. So we collected the latest post-earnings consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus from Phreesia's six analysts is for revenues of US$145.1m in 2021, which would reflect a sizeable 22% increase on its sales over the past 12 months. Per-share losses are expected to explode, reaching US$0.39 per share. Yet prior to the latest earnings, analysts had been forecasting revenues of US$143.9m and losses of US$0.39 per share in 2021. There was no real change to the revenue estimates, but analysts do seem more bullish on earnings, given the earnings per share expectations following these results.
The consensus price target was unchanged at US$33.00, suggesting that the business - losses and all - is executing in line with estimates. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Phreesia at US$33.00 per share, while the most bearish prices it at US$31.00. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
Further, we can compare these estimates to past performance, and see how Phreesia forecasts compare to the wider market's forecast performance. We can infer from the latest estimates that analysts are expecting a continuation of Phreesia's historical trends, as next year's forecast 22% revenue growth is roughly in line with 25% annual revenue growth over the past year. Compare this with the wider market, which analyst estimates (in aggregate) suggest will see revenues grow 13% next year. So it's pretty clear that Phreesia is forecast to grow substantially faster than its market.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for next year. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that Phreesia'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 Phreesia analysts - going out to 2023, and you can see them free on our platform here.
We also provide an overview of the Phreesia Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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