It's been a pretty great week for Enhabit, Inc. (NYSE:EHAB) shareholders, with its shares surging 17% to US$10.34 in the week since its latest full-year results. The statutory results were mixed overall, with revenues of US$1.0b in line with analyst forecasts, but losses of US$1.61 per share, some 10.0% larger than the analysts were predicting. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
After the latest results, the nine analysts covering Enhabit are now predicting revenues of US$1.08b in 2024. If met, this would reflect a credible 3.7% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Enhabit forecast to report a statutory profit of US$0.21 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.07b and earnings per share (EPS) of US$0.19 in 2024. Although the revenue estimates have not really changed, we can see there's been a solid gain to earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.
The consensus price target was unchanged at US$10.57, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Enhabit at US$14.00 per share, while the most bearish prices it at US$8.00. 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.
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. One thing stands out from these estimates, which is that Enhabit is forecast to grow faster in the future than it has in the past, with revenues expected to display 3.7% annualised growth until the end of 2024. If achieved, this would be a much better result than the 1.7% annual decline over the past three years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.7% annually for the foreseeable future. So although Enhabit's revenue growth is expected to improve, it is still expected to grow slower than the industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Enhabit 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 Enhabit's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$10.57, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Enhabit. Long-term earnings power is much more important than next year's profits. We have forecasts for Enhabit going out to 2026, and you can see them free on our platform here.
It might also be worth considering whether Enhabit's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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.