Yahoo Finance Analysts Have Made A Financial Statement On Cano Health, Inc.'s (NYSE:CANO) First-Quarter Report
Cano Health, Inc. (NYSE:CANO) defied analyst predictions to release its quarterly results, which were ahead of market expectations. Results overall were solid, with revenues arriving 4.9% better than analyst forecasts at US$867m. Higher revenues also resulted in substantially lower statutory losses which, at US$0.12 per share, were 4.9% smaller than the analysts expected. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Cano Health after the latest results.
Check out our latest analysis for Cano Health
Taking into account the latest results, the consensus forecast from Cano Health's eight analysts is for revenues of US$3.23b in 2023, which would reflect a solid 11% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 52% to US$0.42. Before this latest report, the consensus had been expecting revenues of US$3.19b and US$0.45 per share in losses. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrade to loss per share forecasts for this year.
There's been no major changes to the consensus price target of US$2.78, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock's valuation. 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 Cano Health at US$7.00 per share, while the most bearish prices it at US$0.50. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Cano Health's revenue growth is expected to slow, with the forecast 15% annualised growth rate until the end of 2023 being well below the historical 55% p.a. growth over the last three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.6% annually. So it's pretty clear that, while Cano Health's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$2.78, with the latest estimates not enough to have an impact on their price targets.
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. We have estimates - from multiple Cano Health analysts - going out to 2025, and you can see them free on our platform here.
Before you take the next step you should know about the 4 warning signs for Cano Health (2 don't sit too well with us!) 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.
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