Establishment Labs Holdings Inc. (NASDAQ:ESTA) Analysts Are Pretty Bullish On The Stock After Recent Results
Shareholders of Establishment Labs Holdings Inc. (NASDAQ:ESTA) will be pleased this week, given that the stock price is up 19% to US$44.11 following its latest full-year results. Revenue hit US$165m in line with forecasts, although the company reported a statutory loss per share of US$3.07 that was somewhat smaller than the analysts expected. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for Establishment Labs Holdings
Taking into account the latest results, the current consensus from Establishment Labs Holdings' seven analysts is for revenues of US$180.5m in 2024. This would reflect a decent 9.3% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 42% to US$1.71. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$173.7m and losses of US$1.97 per share in 2024. So it seems there's been a definite increase in optimism about Establishment Labs Holdings' future following the latest consensus numbers, with a cut to the loss per share forecasts in particular.
The consensus price target rose 10% to US$52.86, with the analysts encouraged by the higher revenue and lower forecast losses for next year. 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 Establishment Labs Holdings analyst has a price target of US$65.00 per share, while the most pessimistic values it at US$49.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Establishment Labs Holdings' revenue growth is expected to slow, with the forecast 9.3% annualised growth rate until the end of 2024 being well below the historical 21% p.a. growth over the last five years. Compare this to the 242 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 7.8% per year. So it's pretty clear that, while Establishment Labs Holdings' revenue growth is expected to slow, it's expected to grow roughly in line with the 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 upgraded their revenue forecasts, although the latest estimates suggest that Establishment Labs Holdings will grow in line with the overall industry. We note an upgrade to the price target, suggesting that the analysts believes 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 forecasts for Establishment Labs Holdings going out to 2026, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 2 warning signs for Establishment Labs Holdings that you need to be mindful of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
