Axonics Modulation Technologies, Inc. (NASDAQ:AXNX) just released its latest third-quarter results and things are looking bullish. Sales crushed expectations at US$35m, beating expectations by 54%. Axonics Modulation Technologies reported a statutory loss of US$0.24 per share, which - although not amazing - was much smaller than the analysts predicted. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. 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 current consensus from Axonics Modulation Technologies' nine analysts is for revenues of US$157.2m in 2021, which would reflect a huge 81% increase on its sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 36% to US$1.22. Before this latest report, the consensus had been expecting revenues of US$155.0m and US$1.30 per share in losses. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers were unchanged.
The average price target rose 9.8% to US$61.00, with the analysts signalling that the forecast reduction in losses would be a positive for the stock's valuation. 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 Axonics Modulation Technologies analyst has a price target of US$77.00 per share, while the most pessimistic values it at US$53.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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. It's pretty clear that there is an expectation that Axonics Modulation Technologies' revenue growth will slow down substantially, with revenues next year expected to grow 81%, compared to a historical growth rate of 147% over the past three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.9% next year. Even after the forecast slowdown in growth, it seems obvious that Axonics Modulation Technologies is also expected to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Axonics Modulation Technologies analysts - going out to 2023, and you can see them free on our platform here.
You still need to take note of risks, for example - Axonics Modulation Technologies has 4 warning signs we think you should be aware of.
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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