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AxoGen, Inc. Just Reported, And Analysts Assigned A US$22.17 Price Target

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It's been a sad week for AxoGen, Inc. (NASDAQ:AXGN), who've watched their investment drop 13% to US$12.99 in the week since the company reported its full-year result. Sales hit US$107m in line with forecasts, although the company reported a statutory loss per share of US$0.74 that was somewhat smaller than analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are 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 analysts are expecting for next year.

See our latest analysis for AxoGen

NasdaqCM:AXGN Past and Future Earnings, February 27th 2020
NasdaqCM:AXGN Past and Future Earnings, February 27th 2020

Taking into account the latest results, the current consensus from AxoGen's six analysts is for revenues of US$125.4m in 2020, which would reflect a decent 18% increase on its sales over the past 12 months. Yet prior to the latest earnings, analysts had been forecasting revenues of US$126.2m and losses of US$0.56 per share in 2020. So there's definitely been a decline in analyst sentiment after the latest results, noting the large cut to new EPS forecasts.

With the increase in forecast losses for next year, it's perhaps no surprise to see that the average analyst price target dipped 6.3% to US$22.17, with analysts signalling that growing losses would be a definite concern. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic AxoGen analyst has a price target of US$30.00 per share, while the most pessimistic values it at US$19.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

In addition, we can look to AxoGen's past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. It's pretty clear that analysts expect AxoGen's revenue growth will slow down substantially, with revenues next year expected to grow 18%, compared to a historical growth rate of 34% over the past five years. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.7% next year. Even after the forecast slowdown in growth, it seems obvious that analysts still thinkAxoGen will grow faster than the wider market.

The Bottom Line

The most obvious conclusion is that analysts made no changes to their forecasts for a loss next year. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that AxoGen's revenues are expected to grow faster than the wider market. Analysts also downgraded their price target, suggesting that the latest news has led analysts to become more pessimistic about the intrinsic value of the business.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have forecasts for AxoGen going out to 2023, and you can see them free on our platform here.

You can also see our analysis of AxoGen's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.