electroCore, Inc. (NASDAQ:ECOR) shares fell 3.7% to US$1.58 in the week since its latest quarterly results. Losses came in much smaller than expected, at just US$0.36 per share, even though revenues of US$683k missed analyst expectations by a remarkable 43%. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see analysts' latest post-earnings forecasts for next year.
Taking into account the latest results, the latest consensus from electroCore's two analysts is for revenues of US$13.0m in 2020, which would reflect a substantial 524% improvement in sales compared to the last 12 months. Losses are forecast to balloon 41% to US$1.04 per share. Yet prior to the latest earnings, analysts had been forecasting revenues of US$20.6m and losses of US$0.98 per share in 2020. There's been a definite change in sentiment after these results, with analysts administering a to next year's revenue estimates, while at the same time substantially upgrading EPS. It's almost as though the business is forecast to reduce its focus on growth to enhance profitability.
The consensus price target fell 27% to US$7.67, with analysts clearly concerned about the company following the weaker revenue and earnings outlook.
It can also be useful to step back and take a broader view of how analyst forecasts compare to electroCore's performance in recent years. It's clear from the latest estimates that electroCore's rate of growth is expected to accelerate meaningfully, with forecast 524% revenue growth noticeably faster than its historical growth of 53%p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 8.2% per year. It seems obvious that, while the growth outlook is brighter than the recent past, analysts also expect electroCore to grow faster than the wider market.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses next year, perhaps suggesting electroCore is moving incrementally towards profitability. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by the latest results, leading to a lower estimate of electroCore's future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on electroCore. Long-term earnings power is much more important than next year's profits. We have analyst estimates for electroCore going out as far as 2023, 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.
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