There's been a major selloff in Accelerate Diagnostics, Inc. (NASDAQ:AXDX) shares in the week since it released its full-year report, with the stock down 21% to US$12.81. The results overall were pretty much dead in line with analyst forecasts; revenues were US$9.3m and statutory losses were US$1.55 per share. 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. We've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.
Taking into account the latest results, the latest consensus from Accelerate Diagnostics's three analysts is for revenues of US$15.6m in 2020, which would reflect a sizeable 68% improvement in sales compared to the last 12 months. Before this latest report, the consensus had been expecting revenues of US$23.2m and US$1.58 per share in losses. So there's been quite a change-up of views after the latest results, with analysts making a serious cut to their revenue forecasts while also granting a small lift in to the earnings per share numbers.
Analysts have cut their price target 8.7% to US$14.00 per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. The most optimistic Accelerate Diagnostics analyst has a price target of US$16.00 per share, while the most pessimistic values it at US$12.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
Further, we can compare these estimates to past performance, and see how Accelerate Diagnostics forecasts compare to the wider market's forecast performance. We can infer from the latest estimates that analysts are expecting a continuation of Accelerate Diagnostics's historical trends, as next year's forecast 68% revenue growth is roughly in line with 64% annual revenue growth over the past five years. Compare this with the wider market, which analyst estimates (in aggregate) suggest will see revenues grow 7.5% next year. So it's pretty clear that Accelerate Diagnostics is forecast to grow substantially faster than its market.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider market. Still, earnings are more important to the intrinsic value of the business. Analysts also downgraded their price target, suggesting that the latest news has led analysts to become more pessimistic about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on Accelerate Diagnostics. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Accelerate Diagnostics going out to 2022, and you can see them free on our platform here..
You can also view our analysis of Accelerate Diagnostics's balance sheet, and whether we think Accelerate Diagnostics is carrying too much debt, for free on our platform here.
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