Select Medical Holdings Corporation (NYSE:SEM) Just Released Its Yearly Earnings: Here's What Analysts Think
It's been a good week for Select Medical Holdings Corporation (NYSE:SEM) shareholders, because the company has just released its latest yearly results, and the shares gained 5.0% to US$28.50. Results were roughly in line with estimates, with revenues of US$6.7b and statutory earnings per share of US$1.91. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
View our latest analysis for Select Medical Holdings
After the latest results, the five analysts covering Select Medical Holdings are now predicting revenues of US$6.96b in 2024. If met, this would reflect a satisfactory 4.4% improvement in revenue compared to the last 12 months. Per-share earnings are expected to swell 12% to US$2.13. Before this earnings report, the analysts had been forecasting revenues of US$6.95b and earnings per share (EPS) of US$2.20 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
The consensus price target held steady at US$34.10, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. The most optimistic Select Medical Holdings analyst has a price target of US$40.00 per share, while the most pessimistic values it at US$28.50. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Select Medical Holdings shareholders.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Select Medical Holdings' revenue growth is expected to slow, with the forecast 4.4% annualised growth rate until the end of 2024 being well below the historical 5.6% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.5% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Select Medical Holdings.
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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Select Medical Holdings' revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$34.10, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Select Medical Holdings analysts - going out to 2025, and you can see them free on our platform here.
Even so, be aware that Select Medical Holdings is showing 2 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...
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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.
