As you might know, U.S. Physical Therapy, Inc. (NYSE:USPH) recently reported its first-quarter numbers. Results were mixed, with revenues of US$113m exceeding expectations, even as statutory earnings per share (EPS) fell badly short. Earnings were US$0.20 per share, -50% short of analyst expectations. The 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus, from the five analysts covering U.S. Physical Therapy, is for revenues of US$408.2m in 2020, which would reflect an uneasy 14% reduction in U.S. Physical Therapy's sales over the past 12 months. Statutory earnings per share are expected to plunge 79% to US$0.48 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$382.6m and earnings per share (EPS) of US$0.60 in 2020. While next year's revenue estimates increased, there was also a real cut to EPS expectations, suggesting the consensus has a bit of a mixed view of these results.
The consensus price target fell 10% to US$77.00, suggesting that the analysts are primarily focused on earnings as the driver of value for this business. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic U.S. Physical Therapy analyst has a price target of US$84.00 per share, while the most pessimistic values it at US$69.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
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 sales are expected to reverse, with the forecast 14% revenue decline a notable change from historical growth of 9.7% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 7.0% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - U.S. Physical Therapy is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of U.S. Physical Therapy's future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for U.S. Physical Therapy going out to 2022, and you can see them free on our platform here..
Even so, be aware that U.S. Physical Therapy is showing 2 warning signs in our investment analysis , you should know about...
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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. Thank you for reading.