Shareholders will be ecstatic, with their stake up 39% over the past week following BioHiTech Global, Inc.'s (NASDAQ:BHTG) latest first-quarter results. Revenues beat expectations, with US$1.4m in sales being 18% above estimates. The company still lost US$0.16 per share, tracking roughly in line with expectations. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the most recent consensus for BioHiTech Global from two analysts is for revenues of US$5.96m in 2020 which, if met, would be a sizeable 23% increase on its sales over the past 12 months. Losses are forecast to narrow 2.2% to US$0.56 per share. Before this latest report, the consensus had been expecting revenues of US$7.35m and US$0.45 per share in losses. There's been a definite change in sentiment in this update, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.
The analysts lifted their price target 27% to US$3.50, implicitly signalling that lower earnings per share are not expected to have a longer-term impact on the stock's value.
Of course, another way to look at these forecasts is to place them into context against the industry itself. Next year brings more of the same, according to the analysts, with revenue forecast to grow 23%, in line with its 23% annual growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 4.5% next year. So although BioHiTech Global is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at BioHiTech Global. They also downgraded their revenue estimates, although industry data suggests that BioHiTech Global's revenues are 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 BioHiTech Global. Long-term earnings power is much more important than next year's profits. We have analyst estimates for BioHiTech Global going out as far as 2022, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 6 warning signs for BioHiTech Global you should be aware of, and 1 of them doesn't sit too well with us.
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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