Earnings Miss: CareRx Corporation Missed EPS By 60% And Analysts Are Revising Their Forecasts
It's been a good week for CareRx Corporation (TSE:CRRX) shareholders, because the company has just released its latest second-quarter results, and the shares gained 7.4% to CA$3.63. It looks like a pretty bad result, all things considered. Although revenues of CA$94m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 60% to hit CA$0.01 per share. 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.
Taking into account the latest results, CareRx's six analysts currently expect revenues in 2026 to be CA$381.7m, approximately in line with the last 12 months. Statutory earnings per share are expected to plunge 80% to CA$0.087 in the same period. In the lead-up to this report, the analysts had been modelling revenues of CA$384.7m and earnings per share (EPS) of CA$0.12 in 2026. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.
View our latest analysis for CareRx
The consensus price target held steady at CA$5.14, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. There are some variant perceptions on CareRx, with the most bullish analyst valuing it at CA$6.25 and the most bearish at CA$4.25 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await CareRx shareholders.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that CareRx's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 2.6% growth on an annualised basis. This is compared to a historical growth rate of 6.6% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.0% annually. So it's pretty clear that, while CareRx's revenue growth is expected to slow, it's expected to grow roughly in line with the 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. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at CA$5.14, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for CareRx going out to 2028, and you can see them free on our platform here..
You should always think about risks though. Case in point, we've spotted 2 warning signs for CareRx you should be aware of, and 1 of them is a bit unpleasant.
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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.