Earnings Release: Here's Why Analysts Cut Their MedPlus Health Services Limited (NSE:MEDPLUS) Price Target To ₹1,013
There's been a notable change in appetite for MedPlus Health Services Limited (NSE:MEDPLUS) shares in the week since its quarterly report, with the stock down 12% to ₹715. Results were roughly in line with estimates, with revenues of ₹19b and statutory earnings per share of ₹18.29. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on MedPlus Health Services after the latest results.
Taking into account the latest results, the most recent consensus for MedPlus Health Services from seven analysts is for revenues of ₹80.9b in 2027. If met, it would imply a decent 12% increase on its revenue over the past 12 months. Statutory earnings per share are expected to shrink 5.2% to ₹16.60 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹78.6b and earnings per share (EPS) of ₹21.60 in 2027. So it's pretty clear the analysts have mixed opinions on MedPlus Health Services after the latest results; even though they upped their revenue numbers, it came at the cost of a pretty serious reduction to per-share earnings expectations.
View our latest analysis for MedPlus Health Services
The analysts also cut MedPlus Health Services' price target 13% to ₹1,013, implying that lower forecast earnings are expected to have a more negative impact than can be offset by the increase in revenue. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic MedPlus Health Services analyst has a price target of ₹1,217 per share, while the most pessimistic values it at ₹780. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 16% growth on an annualised basis. That is in line with its 15% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 8.1% per year. So although MedPlus Health Services is expected to maintain its revenue growth rate, it's definitely expected to grow faster than 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. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for MedPlus Health Services going out to 2029, and you can see them free on our platform here.
Even so, be aware that MedPlus Health Services is showing 1 warning sign in our investment analysis , you should know about...
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