Amedisys, Inc. (NASDAQ:AMED) just released its third-quarter report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 2.1% to hit US$544m. Amedisys also reported a statutory profit of US$2.16, which was an impressive 75% above what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Amedisys after the latest results.
After the latest results, the 13 analysts covering Amedisys are now predicting revenues of US$2.30b in 2021. If met, this would reflect a solid 14% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to shoot up 21% to US$6.18. Before this earnings report, the analysts had been forecasting revenues of US$2.30b and earnings per share (EPS) of US$6.04 in 2021. So the consensus seems to have become somewhat more optimistic on Amedisys' earnings potential following these results.
The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 7.1% to US$279. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Amedisys, with the most bullish analyst valuing it at US$300 and the most bearish at US$245 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
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 Amedisys' rate of growth is expected to accelerate meaningfully, with the forecast 14% revenue growth noticeably faster than its historical growth of 10%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.8% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Amedisys is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Amedisys' earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Amedisys going out to 2022, and you can see them free on our platform here.
You still need to take note of risks, for example - Amedisys has 1 warning sign we think you should be aware of.
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. 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.
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