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Shareholders might have noticed that CareRx Corporation (TSE:CRRX) filed its quarterly result this time last week. The early response was not positive, with shares down 3.1% to CA$2.18 in the past week. It was a pretty bad result overall; while revenues were in line with expectations at CA$92m, statutory losses exploded to CA$0.02 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for CareRx
Following last week's earnings report, CareRx's six analysts are forecasting 2024 revenues to be CA$365.1m, approximately in line with the last 12 months. Earnings are expected to improve, with CareRx forecast to report a statutory profit of CA$0.03 per share. In the lead-up to this report, the analysts had been modelling revenues of CA$367.2m and earnings per share (EPS) of CA$0.0085 in 2024. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the considerable lift to earnings per share expectations following these results.
The consensus price target was unchanged at CA$3.91, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on CareRx, with the most bullish analyst valuing it at CA$5.25 and the most bearish at CA$2.75 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 0.8% annualised decline to the end of 2024. That is a notable change from historical growth of 26% 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 3.3% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - CareRx is expected to lag the wider industry.