The analysts covering Premier, Inc. (NASDAQ:PINC) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.
Following the downgrade, the consensus from eight analysts covering Premier is for revenues of US$1.0b in 2025, implying a substantial 24% decline in sales compared to the last 12 months. Per-share earnings are expected to swell 11% to US$0.85. Previously, the analysts had been modelling revenues of US$1.2b and earnings per share (EPS) of US$1.47 in 2025. Indeed, we can see that the analysts are a lot more bearish about Premier's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.
The consensus price target fell 5.3% to US$20.00, with the weaker earnings outlook clearly leading analyst valuation estimates.
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 sales are expected to reverse, with a forecast 24% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 3.0% 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 6.8% annually for the foreseeable future. It's pretty clear that Premier's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Premier.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Premier analysts - going out to 2027, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.