Yahoo Finance US$4.50: That's What Analysts Think ATI Physical Therapy, Inc. (NYSE:ATIP) Is Worth After Its Latest Results
It's been a mediocre week for ATI Physical Therapy, Inc. (NYSE:ATIP) shareholders, with the stock dropping 18% to US$2.13 in the week since its latest annual results. Revenues were US$612m, with ATI Physical Therapy reporting some 2.6% below analyst expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for ATI Physical Therapy
Taking into account the latest results, the current consensus from ATI Physical Therapy's five analysts is for revenues of US$690.7m in 2022, which would reflect a solid 13% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 96% to US$0.17. Before this latest report, the consensus had been expecting revenues of US$697.9m and US$0.17 per share in losses. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrade to loss per share forecasts for this year.
Even with the lower forecast losses, the analysts lowered their valuations, with the average price target falling 6.9% to US$4.50. It looks likethe analysts have become less optimistic about the overall business. 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 ATI Physical Therapy analyst has a price target of US$6.00 per share, while the most pessimistic values it at US$3.50. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the ATI Physical Therapy's past performance and to peers in the same industry. One thing stands out from these estimates, which is that ATI Physical Therapy is forecast to grow faster in the future than it has in the past, with revenues expected to display 13% annualised growth until the end of 2022. If achieved, this would be a much better result than the 8.2% annual decline over the past three years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 7.5% annually. Not only are ATI Physical Therapy's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of ATI Physical Therapy's future valuation.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for ATI Physical Therapy going out to 2024, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with ATI Physical Therapy (at least 1 which doesn't sit too well with us) , and understanding them should be part of your investment process.
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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.
