What Does The Future Hold For Sensus Healthcare, Inc. (NASDAQ:SRTS)? These Analysts Have Been Cutting Their Estimates
Today is shaping up negative for Sensus Healthcare, Inc. (NASDAQ:SRTS) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative. The stock price has risen 7.1% to US$2.56 over the past week. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.
Following the downgrade, the most recent consensus for Sensus Healthcare from its six analysts is for revenues of US$22m in 2021 which, if met, would be a major 69% increase on its sales over the past 12 months. Before the latest update, the analysts were foreseeing US$28m of revenue in 2021. The consensus view seems to have become more pessimistic on Sensus Healthcare, noting the pretty serious reduction to revenue estimates in this update.
View our latest analysis for Sensus Healthcare
The consensus price target fell 11% to US$4.52, with the analysts clearly less optimistic about Sensus Healthcare's valuation following this update. 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 Sensus Healthcare analyst has a price target of US$6.00 per share, while the most pessimistic values it at US$2.95. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying 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. The analysts are definitely expecting Sensus Healthcare's growth to accelerate, with the forecast 69% growth ranking favourably alongside historical growth of 15% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.9% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Sensus Healthcare is expected to grow much faster than its industry.
The Bottom Line
The clear low-light was that analysts slashing their revenue forecasts for Sensus Healthcare next year. They're also forecasting more rapid revenue growth than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of Sensus Healthcare going forwards.
Looking to learn more? We have estimates for Sensus Healthcare from its six analysts out until 2022, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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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