Last week, you might have seen that Pro Medicus Limited (ASX:PME) released its half-yearly result to the market. The early response was not positive, with shares down 3.1% to AU$279 in the past week. Results overall were respectable, with statutory earnings of AU$0.49 per share roughly in line with what the analysts had forecast. Revenues of AU$97m came in 3.9% ahead of analyst predictions. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Pro Medicus after the latest results.

Check out our latest analysis for Pro Medicus

Following the latest results, Pro Medicus' 13 analysts are now forecasting revenues of AU$215.8m in 2025. This would be a decent 16% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to ascend 17% to AU$1.10. In the lead-up to this report, the analysts had been modelling revenues of AU$214.6m and earnings per share (EPS) of AU$1.07 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target rose 15% to AU$253, suggesting that higher earnings estimates flow through to the stock's valuation as well. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Pro Medicus analyst has a price target of AU$330 per share, while the most pessimistic values it at AU$46.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of 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. The analysts are definitely expecting Pro Medicus' growth to accelerate, with the forecast 35% annualised growth to the end of 2025 ranking favourably alongside historical growth of 26% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 22% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Pro Medicus is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Pro Medicus' earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Pro Medicus analysts - going out to 2027, 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 1 warning sign with Pro Medicus , and understanding this 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.