Yahoo Finance What Does The Future Hold For MultiPlan Corporation (NYSE:MPLN)? These Analysts Have Been Cutting Their Estimates
The latest analyst coverage could presage a bad day for MultiPlan Corporation (NYSE:MPLN), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.
Following the latest downgrade, the two analysts covering MultiPlan provided consensus estimates of US$1.0b revenue in 2023, which would reflect a definite 11% decline on its sales over the past 12 months. Before the latest update, the analysts were foreseeing US$1.2b of revenue in 2023. It looks like forecasts have become a fair bit less optimistic on MultiPlan, given the measurable cut to revenue estimates.
Check out our latest analysis for MultiPlan
The consensus price target fell 44% to US$2.68, with the analysts clearly less optimistic about MultiPlan's valuation following this update. 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 MultiPlan analyst has a price target of US$3.00 per share, while the most pessimistic values it at US$2.05. 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 MultiPlan 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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 9.2% by the end of 2023. This indicates a significant reduction from annual growth of 2.7% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 13% per year. It's pretty clear that MultiPlan's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The clear low-light was that analysts slashing their revenue forecasts for MultiPlan next year. They also expect company revenue to perform worse than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Given the stark change in sentiment, we'd understand if investors became more cautious on MultiPlan after today.
As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with MultiPlan's financials, such as recent substantial insider selling. Learn more, and discover the 1 other warning sign we've identified, for free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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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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