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Envista Holdings Corporation Just Missed Earnings - But Analysts Have Updated Their Models

Shareholders might have noticed that Envista Holdings Corporation (NYSE:NVST) filed its first-quarter result this time last week. The early response was not positive, with shares down 6.8% to US$19.00 in the past week. Statutory earnings per share fell badly short of expectations, coming in at US$0.14, some 40% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$624m. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Envista Holdings

earnings-and-revenue-growth
earnings-and-revenue-growth

Following last week's earnings report, Envista Holdings' 13 analysts are forecasting 2024 revenues to be US$2.57b, approximately in line with the last 12 months. Envista Holdings is also expected to turn profitable, with statutory earnings of US$0.84 per share. In the lead-up to this report, the analysts had been modelling revenues of US$2.60b and earnings per share (EPS) of US$1.12 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

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It might be a surprise to learn that the consensus price target fell 16% to US$20.50, with the analysts clearly linking lower forecast earnings to the performance of the stock price. 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. There are some variant perceptions on Envista Holdings, with the most bullish analyst valuing it at US$25.00 and the most bearish at US$17.50 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 0.5% growth on an annualised basis. That is in line with its 0.5% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 8.1% per year. So it's pretty clear that Envista Holdings is expected to grow slower than similar companies in the same industry.

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 Envista Holdings' revenue is expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Envista Holdings' future valuation.

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 forecasts for Envista Holdings going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Envista Holdings that you should be aware of.

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.