The quarterly results for Definitive Healthcare Corp. (NASDAQ:DH) were released last week, making it a good time to revisit its performance. It was a pretty bad result overall; while revenues were in line with expectations at US$63m, statutory losses exploded to US$1.12 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Definitive Healthcare after the latest results.
Taking into account the latest results, the current consensus, from the eleven analysts covering Definitive Healthcare, is for revenues of US$243.9m in 2025. This implies a perceptible 4.7% reduction in Definitive Healthcare's revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 95% to US$0.16. Before this latest report, the consensus had been expecting revenues of US$254.1m and US$0.23 per share in losses. Although the revenue estimates have fallen somewhat, Definitive Healthcare'sfuture looks a little different to the past, with a very favorable reduction to the loss per share forecasts in particular.
The analysts have cut their price target 30% to US$5.28per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Definitive Healthcare analyst has a price target of US$7.00 per share, while the most pessimistic values it at US$4.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Definitive Healthcare's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 3.8% by the end of 2025. This indicates a significant reduction from annual growth of 21% 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 9.8% annually for the foreseeable future. It's pretty clear that Definitive Healthcare's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. With that said, earnings are more important to the long-term value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
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 Definitive Healthcare going out to 2026, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 1 warning sign for Definitive Healthcare that you should be aware of.
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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.
