AdaptHealth Corp. (NASDAQ:AHCO) shares fell 2.7% to US$16.20 in the week since its latest yearly results. It looks like the results were pretty good overall. While revenues of US$530m were in line with analyst predictions, statutory losses were much smaller than expected, with AdaptHealth losing US$0.66 per share. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on AdaptHealth after the latest results.

See our latest analysis for AdaptHealth

Taking into account the latest results, the current consensus from AdaptHealth's four analysts is for revenues of US$774.6m in 2020, which would reflect a sizeable 46% increase on its sales over the past 12 months. AdaptHealth is also expected to turn profitable, with statutory earnings of US$0.48 per share. Before this earnings report, analysts had been forecasting revenues of US$770.9m and earnings per share (EPS) of US$0.47 in 2020. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The consensus price target rose 11% to US$15.75 despite there being no meaningful change to earnings estimates. It could be that analysts are reflecting the predictability of AdaptHealth's earnings by assigning a price premium. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. The most optimistic AdaptHealth analyst has a price target of US$20.00 per share, while the most pessimistic values it at US$12.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

It can also be useful to step back and take a broader view of how analyst forecasts compare to AdaptHealth's performance in recent years. It's clear from the latest estimates that AdaptHealth's rate of growth is expected to accelerate meaningfully, with forecast 46% revenue growth noticeably faster than its historical growth of 34%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 6.5% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that AdaptHealth is expected to grow much faster than its market.

The Bottom Line

The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that AdaptHealth's revenues are expected to grow faster than the wider market. Analysts also upgraded their price target, suggesting that analysts believe the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on AdaptHealth. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple AdaptHealth analysts - going out to 2023, and you can see them free on our platform here.

It might also be worth considering whether AdaptHealth's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.