Shareholders in Biomerica, Inc. (NASDAQ:BMRA) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. 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.
After the upgrade, the twin analysts covering Biomerica are now predicting revenues of US$12m in 2021. If met, this would reflect a major 124% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 63% to US$0.10. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$7.5m and losses of US$0.20 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 next year's revenue estimates, while at the same time reducing their loss estimates.
The consensus price target rose 30% to US$10.25, 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. There are some variant perceptions on Biomerica, with the most bullish analyst valuing it at US$11.00 and the most bearish at US$9.50 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Biomerica's past performance and to peers in the same industry. The analysts are definitely expecting Biomerica's growth to accelerate, with the forecast 124% growth ranking favourably alongside historical growth of 0.2% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.9% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Biomerica is expected to grow much faster than its industry.
The Bottom Line
The most important thing here is that analysts reduced their loss per share estimates for next year, reflecting increased optimism around Biomerica's prospects. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Biomerica could be worth investigating further.
Analysts are clearly in love with Biomerica at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as a short cash runway. For more information, you can click through to our platform to learn more about this and the 3 other flags we've identified .
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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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. Thank you for reading.