As you might know, Applied DNA Sciences, Inc. (NASDAQ:APDN) last week released its latest second-quarter, and things did not turn out so great for shareholders. Earnings missed the mark, with revenues of US$552k falling badly (42%) short of expectations. Losses were mildly higher, with a US$0.79 per-share loss being 2.6% above what the analyst modelled. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analyst is expecting for next year.
Following last week's earnings report, Applied DNA Sciences' sole analyst are forecasting 2020 revenues to be US$4.89m, approximately in line with the last 12 months. Losses are predicted to fall substantially, shrinking 27% to US$2.99. Yet prior to the latest earnings, the analyst had been forecasting revenues of US$6.01m and losses of US$2.84 per share in 2020. So there's been quite a change-up of views after the recent consensus updates, withthe analyst making a serious cut to their revenue outlook while also expecting losses per share to increase.
The average price target lifted 17% to US$21.00, clearly signalling that the weaker revenue and EPS outlook are not expected to weigh on the stock over the longer term.
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. We would also point out that the forecast 0.4% revenue decline is better than the historical trend, which saw revenues shrink -9.4% annually over the past five years
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Applied DNA Sciences. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. We note an upgrade to the price target, suggesting that the analyst believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on Applied DNA Sciences. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Applied DNA Sciences going out as far as 2021, and you can see them free on our platform here.
You still need to take note of risks, for example - Applied DNA Sciences has 7 warning signs (and 3 which are concerning) we think you should know about.
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