A week ago, Electromed, Inc. (NYSEMKT:ELMD) came out with a strong set of first-quarter numbers that could potentially lead to a re-rate of the stock. It was a solid earnings report, with revenues and earnings per share (EPS) both coming in strong. Revenues were 12% higher than analysts had forecast, at US$8.3m, while EPS were US$0.12 beating analyst models by 1100%. 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. With this in mind, we've gathered the latest forecasts to see what analysts are expecting for next year.
After the latest results, the one analyst covering Electromed are now predicting revenues of US$35.2m in 2020. If met, this would reflect a notable 8.9% improvement in sales compared to the last 12 months. Earnings per share are expected to increase 6.2% to US$0.36. Yet prior to the latest earnings, analysts had been forecasting revenues of US$34.3m and earnings per share (EPS) of US$0.28 in 2020. So it seems there's been a definite increase in optimism about Electromed's future following the latest results, with a massive increase in the earnings per share forecasts in particular.
It will come as no surprise to learn that analysts have increased their price target for Electromed 167% to US$12.00 on the back of these upgrades.
Further, we can compare these estimates to past performance, and see how Electromed forecasts compare to the wider market's forecast performance. It's pretty clear that analysts expect Electromed's revenue growth will slow down substantially, with revenues next year expected to grow 8.9%, compared to a historical growth rate of 12% over the past five years. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.2% next year. So it's pretty clear that, while Electromed's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most important thing to take away from this is that analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Electromed following these results. They also upgraded their revenue forecasts, although the latest estimates suggest that Electromed will grow in line with the overall market. Analysts also upgraded their price target, suggesting that analysts believe the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Electromed going out as far as 2021, and you can see them free on our platform here.
We also provide an overview of the Electromed Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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