Yahoo Finance U.S. Physical Therapy, Inc. Just Missed EPS By 12%: Here's What Analysts Think Will Happen Next
There's been a major selloff in U.S. Physical Therapy, Inc. (NYSE:USPH) shares in the week since it released its full-year report, with the stock down 22% to US$104. Revenues were in line with forecasts, at US$477m, although statutory earnings per share came in 12% below what analysts expected, at US$2.45 per share. Earnings are an important time for investors, as they can track a company's performance, look at what top 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 analysts have changed their mind on U.S. Physical Therapy after the latest results.
See our latest analysis for U.S. Physical Therapy
After the latest results, the five analysts covering U.S. Physical Therapy are now predicting revenues of US$512.9m in 2020. If met, this would reflect a satisfactory 7.5% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to soar 26% to US$3.08. In the lead-up to this report, analysts had been modelling revenues of US$509.6m and earnings per share (EPS) of US$3.16 in 2020. Analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share forecasts for next year.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$118, with analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values U.S. Physical Therapy at US$128 per share, while the most bearish prices it at US$110. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. It's pretty clear that analysts expect U.S. Physical Therapy's revenue growth will slow down substantially, with revenues next year expected to grow 7.5%, compared to a historical growth rate of 10.0% over the past five years. Compare this to the other companies in this market with analyst coverage, which are forecast to grow their revenue at 6.6% per year. So it's pretty clear that, while U.S. Physical Therapy's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for U.S. Physical Therapy. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider market. 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.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple U.S. Physical Therapy analysts - going out to 2021, and you can see them free on our platform here.
You can also see whether U.S. Physical Therapy is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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