Privia Health Group, Inc. Just Missed Earnings - But Analysts Have Updated Their Models
Investors in Privia Health Group, Inc. (NASDAQ:PRVA) had a good week, as its shares rose 7.1% to close at US$21.88 following the release of its yearly results. It looks like the results were a bit of a negative overall. While revenues of US$1.7b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 7.9% to hit US$0.19 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for Privia Health Group
Following the latest results, Privia Health Group's 15 analysts are now forecasting revenues of US$1.73b in 2024. This would be a satisfactory 4.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 22% to US$0.24. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.91b and earnings per share (EPS) of US$0.30 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.
The consensus price target fell 7.0% to US$28.94, with the weaker earnings outlook clearly leading valuation 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 Privia Health Group at US$41.00 per share, while the most bearish prices it at US$21.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Privia Health Group's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 4.6% growth on an annualised basis. This is compared to a historical growth rate of 19% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.6% annually. Factoring in the forecast slowdown in growth, it seems obvious that Privia Health Group is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Privia Health Group 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 1 warning sign for Privia 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.
