This Just In: Analysts Are Boosting Their Quotient Limited (NASDAQ:QTNT) Outlook for This Year
Celebrations may be in order for Quotient Limited (NASDAQ:QTNT) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.
Following this upgrade, Quotient's three analysts are forecasting 2021 revenues to be US$42m, approximately in line with the last 12 months. Losses are forecast to narrow 5.9% to US$1.10 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$35m and losses of US$1.35 per share in 2021. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to this year's revenue estimates, while at the same time reducing their loss estimates.
Check out our latest analysis for Quotient
The consensus price target fell 6.2%, to US$12.67, suggesting that the analysts remain pessimistic on the company, despite the improved earnings and revenue outlook. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Quotient analyst has a price target of US$14.00 per share, while the most pessimistic values it at US$11.00. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Quotient's revenue growth is expected to slow, with forecast 0.7% increase next year well below the historical 15% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 10.0% next year. Factoring in the forecast slowdown in growth, it seems obvious that Quotient is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around Quotient's prospects. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. A lower price target is not intuitively what we would expect from a company whose business prospects are improving - at least judging by these forecasts - but if the underlying fundamentals are strong, Quotient could be one for the watch list.
Analysts are clearly in love with Quotient at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as major dilution from new stock issuance in the past year. For more information, you can click through to our platform to learn more about this and the 2 other warning signs we've identified .
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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@simplywallst.com.
