Microbix Biosystems Inc. (TSE:MBX) last week reported its latest second-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. The results were positive, with revenue coming in at CA$2.9m, beating analyst expectations by 2.7%. The analyst 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 statutory forecasts to see whether the analyst has changed their earnings models, following these results.
After the latest results, the lone analyst covering Microbix Biosystems are now predicting revenues of CA$13.3m in 2020. If met, this would reflect a solid 14% improvement in sales compared to the last 12 months. Prior to the latest earnings, the analyst was forecasting revenues of CA$13.2m in 2020, and did not provide an earnings per share estimate. Overall it looks like Microbix Biosystems is performing in line with expectations, giventhe analyst has updated their numbers and there's been no real change to next year's forecast following these results.
The consensus price target on Microbix Biosystems is CA$0.50 per share. This is the first time in recent history that the analyst we track has assigned a price target to Microbix Biosystems, which could suggest a growing interest in the business among investors in the local market.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Microbix Biosystems' rate of growth is expected to accelerate meaningfully, with the forecast 14% revenue growth noticeably faster than its historical growth of 9.9%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 53% next year. It seems obvious that, while the future growth outlook is brighter than the recent past, Microbix Biosystems is expected to grow slower than the wider industry.
The Bottom Line
The most important thing to take away is that the analyst reconfirmed their revenue estimates for next year, suggesting that the business is performing in line with expectations. Fortunately, the analyst also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Microbix Biosystems' revenues are expected to perform worse than the wider industry. We note the addition of a price target, suggesting that the business has reached a point wherethe analyst feels comfortable deriving a valuation for it.
One Microbix Biosystems broker/analyst has provided estimates out to 2022, which can be seen for free on our platform here.
Before you take the next step you should know about the 6 warning signs for Microbix Biosystems (2 are concerning!) that we have uncovered.
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