BrightSpring Health Services, Inc. (NASDAQ:BTSG) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. Investor sentiment seems to be improving too, with the share price up 6.7% to US$11.37 over the past 7 days. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.
After the upgrade, the eleven analysts covering BrightSpring Health Services are now predicting revenues of US$11b in 2024. If met, this would reflect a meaningful 13% improvement in sales compared to the last 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting US$1.56 in per-share earnings. Previously, the analysts had been modelling revenues of US$9.4b and earnings per share (EPS) of US$0.73 in 2024. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.
Despite these upgrades, the analysts have not made any major changes to their price target of US$16.14, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that BrightSpring Health Services' rate of growth is expected to accelerate meaningfully, with the forecast 18% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 15% p.a. over the past three 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. Factoring in the forecast acceleration in revenue, it's pretty clear that BrightSpring Health Services is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at BrightSpring Health Services.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple BrightSpring Health Services analysts - going out to 2026, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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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.