U.S. Markets close in 1 hr 28 mins
  • S&P 500

    4,151.71
    -11.58 (-0.28%)
     
  • Dow 30

    34,222.10
    -105.69 (-0.31%)
     
  • Nasdaq

    13,404.28
    +25.23 (+0.19%)
     
  • Russell 2000

    2,237.87
    +10.75 (+0.48%)
     
  • Crude Oil

    65.45
    -0.82 (-1.24%)
     
  • Gold

    1,869.20
    +1.60 (+0.09%)
     
  • Silver

    28.37
    +0.10 (+0.34%)
     
  • EUR/USD

    1.2231
    +0.0074 (+0.6115%)
     
  • 10-Yr Bond

    1.6510
    +0.0110 (+0.67%)
     
  • Vix

    19.67
    -0.05 (-0.25%)
     
  • GBP/USD

    1.4195
    +0.0057 (+0.4060%)
     
  • USD/JPY

    108.8820
    -0.3180 (-0.2912%)
     
  • BTC-USD

    43,098.80
    +246.43 (+0.58%)
     
  • CMC Crypto 200

    1,208.45
    -44.69 (-3.57%)
     
  • FTSE 100

    7,034.24
    +1.39 (+0.02%)
     
  • Nikkei 225

    28,406.84
    +582.01 (+2.09%)
     

Here's What Analysts Are Forecasting For Outset Medical, Inc. (NASDAQ:OM) After Its Full-Year Results

  • Oops!
    Something went wrong.
    Please try again later.
Simply Wall St
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.

Investors in Outset Medical, Inc. (NASDAQ:OM) had a good week, as its shares rose 4.6% to close at US$52.81 following the release of its full-year results. Revenues of US$40m missed forecasts by 14%, but at least statutory losses were much smaller than expected, with per-share losses of US$4.85 coming in 47% smaller than what the analysts had forecast. The analysts 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Outset Medical

earnings-and-revenue-growth
earnings-and-revenue-growth

Taking into account the latest results, the consensus forecast from Outset Medical's five analysts is for revenues of US$71.6m in 2021, which would reflect a major 80% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 66% to US$3.82. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$71.6m and losses of US$3.82 per share in 2021.

As a result there was no major change to the consensus price target of US$60.60, implying that the business is trading roughly in line with expectations despite ongoing losses. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Outset Medical at US$65.00 per share, while the most bearish prices it at US$52.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Outset Medical's past performance and to peers in the same industry. We would highlight that Outset Medical's revenue growth is expected to slow, with the forecast 80% annualised growth rate until the end of 2021 being well below the historical 237% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 9.0% per year. So it's pretty clear that, while Outset Medical's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Outset Medical analysts - going out to 2025, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Outset Medical (1 is concerning!) that we have uncovered.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.