Shareholders will be ecstatic, with their stake up 31% over the past week following Identiv, Inc.'s (NASDAQ:INVE) latest first-quarter results. Revenues were a bright spot, with US$18m in sales arriving 3.9% ahead of expectations, although statutory earnings didn't fare nearly so well, recording a loss of US$0.13, some 8.3% below consensus predictions. The 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, Identiv's four analysts currently expect revenues in 2020 to be US$82.5m, approximately in line with the last 12 months. Losses are predicted to fall substantially, shrinking 80% to US$0.04. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$82.1m and losses of US$0.07 per share in 2020. Although the revenue estimates have not really changed Identiv'sfuture looks a little different to the past, with a the loss per share forecasts in particular.
The average price target held steady at US$6.63, seeming to indicate that business is performing in line with expectations. 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. There are some variant perceptions on Identiv, with the most bullish analyst valuing it at US$7.00 and the most bearish at US$6.00 per share. This is a very narrow spread of estimates, implying either that Identiv is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Identiv's revenue growth is expected to slow, with forecast 0.2% increase next year well below the historical 6.2%p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.5% next year. Factoring in the forecast slowdown in growth, it seems obvious that Identiv is also expected to grow slower than other industry participants.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Identiv's revenues are expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Identiv analysts - going out to 2021, and you can see them free on our platform here.
Plus, you should also learn about the 3 warning signs we've spotted with Identiv .
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