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Bio-Techne Corporation (NASDAQ:TECH) defied analyst predictions to release its quarterly results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 6.8% to hit US$195m. Bio-Techne also reported a statutory profit of US$0.92, which was an impressive 45% above what the analysts had forecast. 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 Bio-Techne after the latest results.
After the latest results, the eight analysts covering Bio-Techne are now predicting revenues of US$824.6m in 2021. If met, this would reflect a notable 9.3% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to nosedive 33% to US$3.29 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$842.3m and earnings per share (EPS) of US$3.35 in 2021. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.
The analysts have also increased their price target 6.7% to US$240, clearly signalling that lower revenue forecasts next year are not expected to have a material impact on Bio-Techne's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Bio-Techne analyst has a price target of US$270 per share, while the most pessimistic values it at US$211. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Bio-Techne's revenue growth is expected to slow, with forecast 9.3% increase next year well below the historical 12%p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.2% next year. Factoring in the forecast slowdown in growth, it looks like Bio-Techne is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. With that said, earnings are more important to the long-term value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Bio-Techne going out to 2024, and you can see them free on our platform here..
Before you take the next step you should know about the 2 warning signs for Bio-Techne (1 shouldn't be ignored!) that we have uncovered.
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