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Shareholders of OncoCyte Corporation (NYSEMKT:OCX) will be pleased this week, given that the stock price is up 10% to US$1.74 following its latest third-quarter results. Revenues of US$555k crushed expectations, although expenses understandably increased with statutory losses reaching US$0.10 per share, somewhat higher than what the analysts forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following the latest results, OncoCyte's six analysts are now forecasting revenues of US$6.99m in 2021. This would be a sizeable 881% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 34% to US$0.34. Before this earnings announcement, the analysts had been modelling revenues of US$6.23m and losses of US$0.37 per share in 2021. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to next year's revenue estimates, while at the same time reducing their loss estimates.
It will come as no surprise to learn thatthe analysts have increased their price target for OncoCyte 24% to US$3.83on the back of these upgrades. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values OncoCyte at US$6.00 per share, while the most bearish prices it at US$2.00. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for OncoCyte going out to 2024, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 5 warning signs for OncoCyte (2 shouldn't be ignored!) that you should be aware of.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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