CA$2.67 - That's What Analysts Think kneat.com, inc. Is Worth After These Results
It's been a pretty great week for kneat.com, inc. (CVE:KSI) shareholders, with its shares surging 18% to CA$2.00 in the week since its latest quarterly results. Revenues came in 108% better than analyst models expected, at CA$1.6m, although losses ballooned 33% to CA$0.02, which is much worse than what was forecast. 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 forecasts to see whether analysts have changed their earnings models, following these results.
Check out our latest analysis for kneat.com
Taking into account the latest results, the most recent consensus for kneat.com from three analysts is for revenues of CA$9.39m in 2020, which is a sizeable 212% increase on its sales over the past 12 months. Losses are forecast to balloon 60% to CA$0.04 per share. Yet prior to the latest earnings, analysts had been forecasting revenues of CA$8.48m and losses of CA$0.035 per share in 2020. Although revenues are expected to increase, analysts have become more pessimistic on earnings, given thereal cut to EPS estimates following the latest report.
It will come as a surprise to learn that the consensus price target rose 6.7% to CA$2.67, with analysts clearly more interested in growing revenue, even as losses intensify. 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 kneat.com analyst has a price target of CA$3.00 per share, while the most pessimistic values it at CA$2.50. 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 be useful to take a broader overview by seeing how analyst forecasts compare, both to the kneat.com's past performance and to peers in the same market. It's clear from the latest estimates that kneat.com's rate of growth is expected to accelerate meaningfully, with forecast 212% revenue growth noticeably faster than its historical growth of 30%p.a. over the past five years. Compare this with other companies in the same market, which are forecast to grow their revenue 14% next year. It seems obvious that, while the growth outlook is brighter than the recent past, analysts also expect kneat.com to grow faster than the wider market.
The Bottom Line
Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider market. Analysts also upgraded their price target, suggesting that analysts believe 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 kneat.com. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple kneat.com analysts - going out to 2022, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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.
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