There's been a major selloff in P3 Health Partners Inc. (NASDAQ:PIII) shares in the week since it released its third-quarter report, with the stock down 44% to US$0.21. It was a pretty bad result overall; while revenues were in line with expectations at US$362m, statutory losses exploded to US$0.29 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for P3 Health Partners

Taking into account the latest results, the most recent consensus for P3 Health Partners from four analysts is for revenues of US$1.61b in 2025. If met, it would imply a meaningful 8.9% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 51% to US$0.31. Before this earnings announcement, the analysts had been modelling revenues of US$1.75b and losses of US$0.21 per share in 2025. While next year's revenue estimates dropped there was also a massive increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

The average price target fell 65% to US$0.95, implicitly signalling that lower earnings per share are a leading indicator for P3 Health Partners' valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values P3 Health Partners at US$1.00 per share, while the most bearish prices it at US$0.90. This is a very narrow spread of estimates, implying either that P3 Health Partners is an easy company to value, or - more likely - the analysts are relying heavily on some key 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 P3 Health Partners' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 7.1% growth on an annualised basis. This is compared to a historical growth rate of 31% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.7% annually. So it's pretty clear that, while P3 Health Partners' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at P3 Health Partners. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of P3 Health Partners' future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on P3 Health Partners. Long-term earnings power is much more important than next year's profits. We have forecasts for P3 Health Partners going out to 2026, and you can see them free on our platform here.

Even so, be aware that P3 Health Partners is showing 5 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...

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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.