US$29.20: That's What Analysts Think Definitive Healthcare Corp. (NASDAQ:DH) Is Worth After Its Latest Results
It's been a sad week for Definitive Healthcare Corp. (NASDAQ:DH), who've watched their investment drop 16% to US$19.91 in the week since the company reported its quarterly result. Revenues were a bright spot, with US$50m in sales arriving 3.0% ahead of expectations, although statutory earnings didn't fare nearly so well, recording a loss of US$0.09, some 7.3% below consensus predictions. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Definitive Healthcare
Taking into account the latest results, the consensus forecast from Definitive Healthcare's ten analysts is for revenues of US$222.5m in 2022, which would reflect a substantial 24% improvement in sales compared to the last 12 months. Losses are forecast to balloon 161% to US$0.27 per share. Before this earnings announcement, the analysts had been modelling revenues of US$220.7m and losses of US$0.20 per share in 2022. So it's pretty clear the analysts have mixed opinions on Definitive Healthcare even after this update; although they reconfirmed their revenue numbers, it came at the cost of a sizeable expansion in per-share losses.
The consensus price target fell 7.9% to US$29.20per share, with the analysts clearly concerned by ballooning losses. 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. Currently, the most bullish analyst values Definitive Healthcare at US$37.00 per share, while the most bearish prices it at US$24.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2022 brings more of the same, according to the analysts, with revenue forecast to display 33% growth on an annualised basis. That is in line with its 40% annual growth over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 13% per year. So it's pretty clear that Definitive Healthcare is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for 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. 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Definitive Healthcare going out to 2024, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 2 warning signs for Definitive Healthcare you should know about.
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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.
