Shares of ASX-listed Sonic Healthcare Limited (AU:SHL) gained 7% as of writing after the company shared an upbeat outlook for its revenue growth in an investor update at its 2024 annual general meeting (AGM). The company stated that it is recovering from the post-pandemic slump, with a 10% revenue growth in the first four months of the new financial year (FY25).
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Sonic Healthcare provides laboratory, pathology, radiology, and primary care medical services in Australasia, Europe, and North America.
Sonic Healthcare Confirms Earnings Forecast for FY25
Sonic Healthcare also confirmed its EBITDA (earnings before interest, tax, depreciation, amortization) guidance of AU$1.70 – AU$1.75 billion for FY25. This marks up to 10% growth from the Fiscal 2024. The company expects its earnings to be driven by its core business growth, cost-cutting measures, and synergies from acquisitions.
Recap of Sonic’s FY24 Performance
In FY24, Sonic reported a 10% year-over-year growth in its total revenue of AU$8.96 billion. Meanwhile, its EBITDA declined 6% to AU$1.6 billion, while net profit fell 25% to AU$511 million, hit by higher costs. However, the company now expects inflationary pressures on labor and other costs to ease.
Additionally, the company secured revenue of AU$655 million annually through multiple acquisitions in Germany, Switzerland, and the US. Looking ahead, the company plans to keep pursuing strategic growth opportunities through acquisitions, supported by its strong balance sheet.
Meanwhile, Sonic Healthcare’s total dividend for FY24 grew 2% year-over-year to AU$1.06 per share. The company believes that its future earnings growth will sustain a progressive dividend strategy.
Is Sonic Healthcare a Good Buy?
According to TipRanks’ consensus forecast, SHL stock has a Hold rating based on one Buy, seven Holds, and one Sell recommendation. The Sonic Healthcare share price target is AU$28.44, which is 1.57% above the current trading level.
