There's been a notable change in appetite for Wrap Technologies, Inc. (NASDAQ:WRTC) shares in the week since its yearly report, with the stock down 20% to US$5.05. Revenues were US$697k, and Wrap Technologies was a dismal 19% short of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus from Wrap Technologies's two analysts is for revenues of US$4.20m in 2020, which would reflect a sizeable 503% increase on its sales over the past 12 months. Prior to the latest earnings, analysts were forecasting revenues of US$5.52m in 2020, and did not provide an EPS estimate. It looks analysts have become a fair bit less optimistic on Wrap Technologies's prospects, given the pretty serious reduction to revenue estimates after the latest results.
Intriguingly, analysts have cut their price target 8.7% to US$8.38 showing a clear decline in sentiment around Wrap Technologies's valuation.
Further, we can compare these estimates to past performance, and see how Wrap Technologies forecasts compare to the wider market's forecast performance. It's pretty clear that analysts expect Wrap Technologies's revenue growth will slow down substantially, with revenues next year expected to grow 503%, compared to a historical growth rate of 2910% over the past year. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.1% next year. So it's pretty clear that, while Wrap Technologies's revenue growth is expected to slow, it's still expected to grow faster than the market itself.
The Bottom Line
The biggest takeaway for us from these new estimates is the bullish forecast for profits next year. 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 Wrap Technologies's future valuation.
At least one of Wrap Technologies's two analysts has provided estimates out to 2022, which can be seen for free on our platform here.
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