US$30.75 - That's What Analysts Think OrthoPediatrics Corp. (NASDAQ:KIDS) Is Worth After These Results
Shareholders will be ecstatic, with their stake up 28% over the past week following OrthoPediatrics Corp.'s (NASDAQ:KIDS) latest quarterly results. Revenue of US$73m came in 6.1% ahead of expectations, although statutory earnings didn't fare nearly so well, recording a loss of US$0.25, a 17% miss. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following the latest results, OrthoPediatrics' eight analysts are now forecasting revenues of US$304.5m in 2027. This would be a meaningful 15% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 35% to US$0.84. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$299.3m and losses of US$0.76 per share in 2027. So it's pretty clear the analysts have mixed opinions on OrthoPediatrics even after this update; although they reconfirmed their revenue numbers, it came at the cost of a notable increase in per-share losses.
Check out our latest analysis for OrthoPediatrics
Despite expectations of heavier losses next year,the analysts have lifted their price target 12% to US$30.75, perhaps implying these losses are not expected to be recurring over the long term. 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 OrthoPediatrics analyst has a price target of US$38.00 per share, while the most pessimistic values it at US$27.00. 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.
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 OrthoPediatrics' revenue growth is expected to slow, with the forecast 12% annualised growth rate until the end of 2027 being well below the historical 21% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.4% per year. So it's pretty clear that, while OrthoPediatrics' 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for OrthoPediatrics going out to 2028, and you can see them free on our platform here.
You still need to take note of risks, for example - OrthoPediatrics has 1 warning sign we think you should be aware of.
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