There's been a major selloff in 1Life Healthcare, Inc. (NASDAQ:ONEM) shares in the week since it released its quarterly report, with the stock down 21% to US$32.76. The results don't look great, especially considering that statutory losses grew 98% toUS$0.29 per share. Revenues of US$121m did beat expectations by 4.4%, but it looks like a bit of a cold comfort. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for 1Life Healthcare

Taking into account the latest results, the most recent consensus for 1Life Healthcare from twelve analysts is for revenues of US$483.3m in 2021 which, if met, would be a meaningful 14% increase on its sales over the past 12 months. Per-share losses are expected to explode, reaching US$0.90 per share. Before this earnings announcement, the analysts had been modelling revenues of US$482.4m and losses of US$0.57 per share in 2021. So it's pretty clear the analysts have mixed opinions on 1Life Healthcare even after this update; although they reconfirmed their revenue numbers, it came at the cost of a very substantial increase in per-share losses.

The consensus price target held steady at US$53.91, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on 1Life Healthcare, with the most bullish analyst valuing it at US$63.00 and the most bearish at US$48.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting 1Life Healthcare is an easy business to forecast or the the analysts are all using similar assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that 1Life Healthcare's revenue growth will slow down substantially, with revenues to the end of 2021 expected to display 20% growth on an annualised basis. This is compared to a historical growth rate of 45% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.9% annually. So it's pretty clear that, while 1Life Healthcare's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for 1Life Healthcare going out to 2023, and you can see them free on our platform here.

Even so, be aware that 1Life Healthcare is showing 3 warning signs in our investment analysis , you should know about...

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.