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Results: Insulet Corporation Beat Earnings Expectations And Analysts Now Have New Forecasts

Insulet Corporation (NASDAQ:PODD) defied analyst predictions to release its first-quarter results, which were ahead of market expectations. The company beat forecasts, with revenue of US$442m, some 4.3% above estimates, and statutory earnings per share (EPS) coming in at US$0.73, 81% ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Insulet

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After the latest results, the 19 analysts covering Insulet are now predicting revenues of US$1.98b in 2024. If met, this would reflect a solid 11% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to dip 7.2% to US$3.10 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$1.96b and earnings per share (EPS) of US$2.93 in 2024. So the consensus seems to have become somewhat more optimistic on Insulet's earnings potential following these results.

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The consensus price target was unchanged at US$234, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. There are some variant perceptions on Insulet, with the most bullish analyst valuing it at US$270 and the most bearish at US$185 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. We would highlight that Insulet's revenue growth is expected to slow, with the forecast 15% annualised growth rate until the end of 2024 being well below the historical 20% 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 8.1% annually. Even after the forecast slowdown in growth, it seems obvious that Insulet is also expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Insulet's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Insulet. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Insulet going out to 2026, and you can see them free on our platform here..

Even so, be aware that Insulet is showing 1 warning sign in our investment analysis , you should know about...

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.