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A week ago, Apyx Medical Corporation (NASDAQ:APYX) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. It looks like a positive result overall, with revenues of US$8.6m beating forecasts by 8.8%. Statutory losses of US$0.14 per share were 8.8% smaller than the analysts expected, likely helped along by the higher revenues. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Apyx Medical after the latest results.
Taking into account the latest results, the consensus forecast from Apyx Medical's four analysts is for revenues of US$38.5m in 2021, which would reflect a substantial 23% improvement in sales compared to the last 12 months. Losses are forecast to balloon 31% to US$0.57 per share. Before this earnings announcement, the analysts had been modelling revenues of US$37.8m and losses of US$0.52 per share in 2021. So it's pretty clear the analysts have mixed opinions on Apyx Medical even after this update; although they reconfirmed their revenue numbers, it came at the cost of a considerable increase in per-share losses.
Despite expectations of heavier losses next year,the analysts have lifted their price target 8.7% to US$12.50, perhaps implying these losses are not expected to be recurring over the long term. 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. There are some variant perceptions on Apyx Medical, with the most bullish analyst valuing it at US$14.00 and the most bearish at US$12.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Apyx Medical's past performance and to peers in the same industry. It's clear from the latest estimates that Apyx Medical's rate of growth is expected to accelerate meaningfully, with the forecast 32% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 1.2% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.9% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Apyx Medical to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts 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 Apyx Medical. 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 Apyx Medical going out to 2025, and you can see them free on our platform here..
Even so, be aware that Apyx Medical is showing 1 warning sign in our investment analysis , you should know about...
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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