ChromaDex Corporation (NASDAQ:CDXC) came out with its quarterly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Results look to have been somewhat negative - revenue fell 4.0% short of analyst estimates at US$14m, although statutory losses were somewhat better. The per-share loss was US$0.07, 22% smaller than the analysts were expecting prior to the result. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. 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 ChromaDex's five analysts is for revenues of US$79.3m in 2021, which would reflect a major 39% increase on its sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 65% to US$0.13. Before this latest report, the consensus had been expecting revenues of US$83.2m and US$0.13 per share in losses.
The consensus price target rose 6.7% to US$8.00, seeming to imply that weaker revenue sentiment is not expected to have a major impact on the company'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 ChromaDex analyst has a price target of US$9.00 per share, while the most pessimistic values it at US$7.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting ChromaDex is an easy business to forecast or the the analysts are all using similar assumptions.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that ChromaDex's rate of growth is expected to accelerate meaningfully, with the forecast 39% revenue growth noticeably faster than its historical growth of 24%p.a. 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 9.0% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect ChromaDex 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. They also downgraded their revenue estimates, although industry data suggests that ChromaDex's 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.
With that in mind, we wouldn't be too quick to come to a conclusion on ChromaDex. Long-term earnings power is much more important than next year's profits. We have forecasts for ChromaDex going out to 2023, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for ChromaDex that 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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