LifeStance Health Group (LFST) Reports Q4 Loss, Highest Revenue Estimate

LifeStance Health Group (LFST) came out with a quarterly loss of $0.13 per share, in line with the Zacks Consensus Estimate. For comparison, a year earlier the loss was $0.32 per share. These numbers have been adjusted for one-off items.

A quarter ago, it was expected that this outpatient mental health services provider would post a loss of $0.15 per share when it actually produced a loss of $0.11, delivering a surprise of 26.67%.

Over the last four quarters, the company has surpassed consensus EPS estimates only once.

LifeStance Health, which belongs to the Zacks Medical – Ambulatory and Home Health Care industry, posted revenues of $229.4 million for the quarter ended December 2022, surpassing the Zacks Consensus Estimate by 6.31%. For comparison, revenues from a year ago were $190 million. The company has topped consensus revenue estimates twice over the last four quarters.

The sustainability of the immediate share price movement based on the recently-released numbers and future earnings expectations will largely depend on management’s commentary on the earnings call.

LifeStance Health shares have lost about 4.1% since the beginning of the year, compared with the S&P 500’s gain of 3.8%.

What’s next for LifeStance Health?

While LifeStance Health has underperformed the market this year, the question that comes to investors’ minds is: what’s next for the stock?

There are no simple answers to this key question, but one reliable measure that can help investors address this issue is the company’s earnings prospects. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of the earnings release, the estimate revision trend for LifeStance Health is mixed. While the magnitude and direction of estimate revisions may change following the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) stock. Therefore, the company’s stock is expected to perform in line with the market in the near future. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the next quarters and the current fiscal year change in the coming days. The current consensus EPS estimate is -$0.12 on revenue of $229.49M for the coming quarter and -$0.49 on revenue of $970.35M for the current fiscal year.

Investors should be aware that the outlook for the industry may also have a significant impact on share prices. In terms of the Zacks Industry Rank, Medical – Ambulatory & Home Health Care is currently in the top 40% of the 250+ Zacks industries. Our research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

One more company in the same industry, Aveanna Healthcare (AVAH), is yet to release results for the quarter ended December 2022. The results are expected to be released on March 16.

This home health care provider is expected to report a quarterly loss of $0.02 per share in its upcoming report, representing a year-over-year change of -120%. The consensus EPS estimate for the quarter has not changed over the last 30 days.

Aveanna Healthcare’s revenue is expected to be $448.17 million, up 8.2% from the year-ago quarter.

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