It's been a pretty great week for AudioEye, Inc. (NASDAQ:AEYE) shareholders, with its shares surging 16% to US$3.91 in the week since its latest third-quarter results. The business exceeded revenue expectations with sales of US$2.8m coming in 5.4% ahead of forecasts. Losses were US$0.27 a share, in line with what analysts predicted. 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 gathered the latest post-earnings forecasts to see what analysts are forecasting for next year.
Following the latest results, AudioEye's dual analysts are now forecasting revenues of US$17.2m in 2020. This would be a sizeable 91% improvement in sales compared to the last 12 months. The loss per share is expected to ameliorate slightly, reducing to US$1.08. Before this earnings announcement, analysts had been forecasting revenues of US$16.6m and losses of US$1.06 per share in 2020. There's been a pretty noticeable increase in sentiment, with analysts upgrading revenues and making a earnings per share in particular
Analysts increased their price target 6.4% to US$10.38, perhaps signalling that higher revenues are a strong leading indicator for AudioEye's valuation.
Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. Analysts are definitely expecting AudioEye's growth to accelerate, with the forecast 91% growth ranking favourably alongside historical growth of 58% per annum over the past five years. Compare this with other companies in the same market, which are forecast to grow their revenue 12% next year. It seems obvious that, while the growth outlook is brighter than the recent past, analysts also expect AudioEye to grow faster than the wider market.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for next year. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider market. There was also a nice increase in the price target, with analysts feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on AudioEye. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.
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