Yahoo Finance Here's What Analysts Are Forecasting For MultiPlan Corporation (NYSE:MPLN) After Its Yearly Results
Investors in MultiPlan Corporation (NYSE:MPLN) had a good week, as its shares rose 3.9% to close at US$4.28 following the release of its yearly results. It was a credible result overall, with revenues of US$1.1b and statutory earnings per share of US$0.16 both in line with analyst estimates, showing that MultiPlan is executing in line with expectations. Following the result, the analyst has 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. So we gathered the latest post-earnings forecasts to see what estimate suggests is in store for next year.
Check out our latest analysis for MultiPlan
Taking into account the latest results, the current consensus from MultiPlan's lone analyst is for revenues of US$1.20b in 2022, which would reflect a modest 7.4% increase on its sales over the past 12 months. Statutory earnings per share are predicted to accumulate 8.9% to US$0.17. Before this earnings report, the analyst had been forecasting revenues of US$1.24b and earnings per share (EPS) of US$0.22 in 2022. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a substantial drop in earnings per share estimates.
The analyst made no major changes to their price target of US$7.00, suggesting the downgrades are not expected to have a long-term impact on MultiPlan's valuation.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that MultiPlan's rate of growth is expected to accelerate meaningfully, with the forecast 7.4% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 2.0% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 16% annually. So it's clear that despite the acceleration in growth, MultiPlan is expected to grow meaningfully slower than the industry average.
The Bottom Line
The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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.
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. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.
We don't want to rain on the parade too much, but we did also find 1 warning sign for MultiPlan that you need to be mindful of.
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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.
