As you might know, BIOLASE, Inc. (NASDAQ:BIOL) last week released its latest quarterly, and things did not turn out so great for shareholders. Revenues missed expectations somewhat, coming in at US$4.8m, but statutory earnings fell catastrophically short, with a loss of US$0.19 some 36% larger than what the analysts had predicted. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following the recent earnings report, the consensus from three analysts covering BIOLASE is for revenues of US$30.3m in 2020, implying a small 5.9% decline in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 31% to US$0.51. Before this latest report, the consensus had been expecting revenues of US$30.9m and US$0.47 per share in losses. Overall it looks as though the analysts were a bit mixed on the latest consensus updates. Although sales forecasts held steady, the consensus also made a to its losses per share forecasts.
The consensus price target held steady at US$2.42, 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 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 BIOLASE analyst has a price target of US$3.50 per share, while the most pessimistic values it at US$1.75. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. Over the past five years, revenues have declined around 4.7% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for a 5.9% decline in revenue next year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 9.3% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect BIOLASE to suffer worse 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 BIOLASE. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$2.42, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for BIOLASE going out to 2021, and you can see them free on our platform here..
Before you take the next step you should know about the 5 warning signs for BIOLASE (1 is significant!) that we have uncovered.
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