As you might know, Performant Financial Corporation (NASDAQ:PFMT) just kicked off its latest quarterly results with some very strong numbers. Revenues and losses per share were both better than expected, with revenues of US$27m leading estimates by 5.8%. Statutory losses were smaller than the analystsexpected, coming in at US$0.05 per share. Following the result, the analysts have 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Performant Financial after the latest results.
NasdaqGS:PFMT Earnings and Revenue Growth May 10th 2024
Following the latest results, Performant Financial's two analysts are now forecasting revenues of US$126.1m in 2024. This would be a notable 9.4% improvement in revenue compared to the last 12 months. Losses are expected to be contained, narrowing 11% from last year to US$0.085. Before this earnings announcement, the analysts had been modelling revenues of US$126.1m and losses of US$0.095 per share in 2024. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a favorable reduction in losses per share in particular.
Even with the lower forecast losses, the analysts lowered their valuations, with the average price target falling 9.1% to US$7.50. It looks likethe analysts have become less optimistic about the overall business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Performant Financial is forecast to grow faster in the future than it has in the past, with revenues expected to display 13% annualised growth until the end of 2024. If achieved, this would be a much better result than the 7.7% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.7% annually. Not only are Performant Financial's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2025, 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 Performant Financial that you need to be mindful of.
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