Investors in InnovAge Holding Corp. (NASDAQ:INNV) had a good week, as its shares rose 4.4% to close at US$4.26 following the release of its quarterly results. Revenue of US$193m came in 2.5% ahead of expectations, although statutory earnings didn't fare nearly so well, recording a loss of US$0.04, a 14% miss. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following the latest results, InnovAge Holding's four analysts are now forecasting revenues of US$848.7m in 2025. This would be a meaningful 14% improvement in revenue compared to the last 12 months. InnovAge Holding is also expected to turn profitable, with statutory earnings of US$0.029 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$847.0m and earnings per share (EPS) of US$0.031 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$6.50, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic InnovAge Holding analyst has a price target of US$7.00 per share, while the most pessimistic values it at US$6.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
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. The analysts are definitely expecting InnovAge Holding's growth to accelerate, with the forecast 11% annualised growth to the end of 2025 ranking favourably alongside historical growth of 7.2% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.7% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect InnovAge Holding to grow faster than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for InnovAge Holding. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. 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. We have forecasts for InnovAge Holding going out to 2026, and you can see them free on our platform here.
You can also see our analysis of InnovAge Holding's Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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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.