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Fluidigm Corporation Just Reported Earnings, And Analysts Cut Their Target Price

Simply Wall St

Last week, you might have seen that Fluidigm Corporation (NASDAQ:FLDM) released its full-year result to the market. The early response was not positive, with shares down 9.2% to US$3.47 in the past week. Revenues came in at US$117m, in line with forecasts and the company reported a statutory loss of US$0.97 per share, roughly in line with expectations. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Fluidigm

NasdaqGS:FLDM Past and Future Earnings, February 13th 2020

Taking into account the latest results, the latest consensus from Fluidigm's five analysts is for revenues of US$126.8m in 2020, which would reflect a meaningful 8.1% improvement in sales compared to the last 12 months. Per-share statutory losses are expected to explode, reaching US$0.75 per share. Before this earnings announcement, analysts had been forecasting revenues of US$124.9m and losses of US$0.76 per share in 2020. There was no real change to the revenue estimates, but analysts do seem more bullish on earnings, given the earnings per share expectations following these results.

Analysts trimmed their valuations, with the average price target falling 10.0% to US$7.20, with the ongoing losses seemingly weighing on sentiment, despite no real changes to the earnings forecasts. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Fluidigm analyst has a price target of US$12.00 per share, while the most pessimistic values it at US$4.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.

Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. One thing stands out from these estimates, which is that analysts are forecasting Fluidigm to grow faster in the future than it has in the past, with revenues expected to grow 8.1%. If achieved, this would be a much better result than the 0.6% annual decline over the past five years. Compare this against analyst estimates for the wider market, which suggest that (in aggregate) market revenues are expected to grow 7.8% next year. So while Fluidigm's revenues are expected to improve, it seems that analysts are expecting it to grow at about the same rate as the overall market.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for next year. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall market. Analysts also downgraded their price target, suggesting that the latest news has led analysts to become more pessimistic about the intrinsic value of the business.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Fluidigm analysts - going out to 2024, and you can see them free on our platform here.

You can also see our analysis of Fluidigm's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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