Shareholders might have noticed that Ortho Clinical Diagnostics Holdings plc (NASDAQ:OCDX) filed its quarterly result this time last week. The early response was not positive, with shares down 8.3% to US$20.60 in the past week. Revenues of US$493m beat expectations by a respectable 4.0%, although statutory losses per share increased. Ortho Clinical Diagnostics Holdings lost US$0.09, which was 153% more than what the analysts had included in their models. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Check out our latest analysis for Ortho Clinical Diagnostics Holdings
Following last week's earnings report, Ortho Clinical Diagnostics Holdings' ten analysts are forecasting 2021 revenues to be US$1.99b, approximately in line with the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 62% to US$0.26. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$1.96b and losses of US$0.24 per share in 2021. While this year's revenue estimates held steady, there was also a notable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
Despite expectations of heavier losses next year,the analysts have lifted their price target 7.1% to US$26.96, perhaps implying these losses are not expected to be recurring over the long term. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Ortho Clinical Diagnostics Holdings at US$30.00 per share, while the most bearish prices it at US$23.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Ortho Clinical Diagnostics Holdings is an easy business to forecast or the the analysts are all using similar assumptions.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Ortho Clinical Diagnostics Holdings' revenue growth will slow down substantially, with revenues to the end of 2021 expected to display 2.5% growth on an annualised basis. This is compared to a historical growth rate of 13% over the past year. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 8.4% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Ortho Clinical Diagnostics Holdings.