LifeStance Health Group, Inc. (NASDAQ:LFST) investors will be delighted, with the company turning in some strong numbers with its latest results. Revenues and losses per share were both better than expected, with revenues of US$313m leading estimates by 3.5%. Statutory losses were smaller than the analystsexpected, coming in at US$0.02 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the most recent consensus for LifeStance Health Group from six analysts is for revenues of US$1.39b in 2025. If met, it would imply a meaningful 15% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 29% to US$0.18. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$1.38b and losses of US$0.18 per share in 2025.
As a result there was no major change to the consensus price target of US$8.08, implying that the business is trading roughly in line with expectations despite ongoing losses. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic LifeStance Health Group analyst has a price target of US$10.00 per share, while the most pessimistic values it at US$7.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
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. We would highlight that LifeStance Health Group's revenue growth is expected to slow, with the forecast 12% annualised growth rate until the end of 2025 being well below the historical 27% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.7% per year. Even after the forecast slowdown in growth, it seems obvious that LifeStance Health Group is also expected 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$8.08, with the latest estimates not enough to have an impact on their price targets.
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 LifeStance Health Group going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for LifeStance Health Group you should know about.
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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.
