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Axonics Modulation Technologies, Inc. Just Reported Third-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

Simply Wall St

It's been a pretty great week for Axonics Modulation Technologies, Inc. (NASDAQ:AXNX) shareholders, with its shares surging 19% to US$26.75 in the week since its latest third-quarter results. Results look to have been somewhat negative - revenue fell 10.0% short of analyst estimates at US$1.3m, although losses were a relative bright spot. The per-share loss was US$0.89, 20% smaller than analysts were expecting prior to the result. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent forecasts to see whether analysts have changed their earnings models, following these results.

Check out our latest analysis for Axonics Modulation Technologies

NasdaqGS:AXNX Past and Future Earnings, November 16th 2019

Taking into account the latest results, the current consensus from Axonics Modulation Technologies's six analysts is for revenues of US$84.5m in 2020, which would reflect a huge 1835% increase on its sales over the past 12 months. Per-share losses are expected to explode, reaching US$1.63 per share. Before this latest report, the consensus had been expecting revenues of US$84.1m and US$1.23 per share in losses. Analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

The consensus price target held steady at US$43.43, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Axonics Modulation Technologies at US$48.00 per share, while the most bearish prices it at US$39.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.

It can also be useful to step back and take a broader view of how analyst forecasts compare to Axonics Modulation Technologies's performance in recent years. We can infer from the latest estimates that analysts are expecting a continuation of Axonics Modulation Technologies's historical trends, as next year's forecast 1835% revenue growth is roughly in line with 1951% annual revenue growth over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 8.2% per year. So although Axonics Modulation Technologies is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider market.

The Bottom Line

The most important thing to take away is that analysts reconfirmed their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. The consensus price target held steady at US$43.43, with the latest estimates not enough to have an impact on analysts' estimated valuations.

With that in mind, we wouldn't be too quick to come to a conclusion on Axonics Modulation Technologies. Long-term earnings power is much more important than next year's profits. We have forecasts for Axonics Modulation Technologies going out to 2023, and you can see them free on our platform here.

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

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.

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. Thank you for reading.