LeMaitre Vascular, Inc. (NASDAQ:LMAT) defied analyst predictions to release its quarterly results, which were ahead of market expectations. Statutory revenue and earnings both blasted past expectations, with revenue of US$25m beating expectations by 45% and earnings per share (EPS) reaching US$0.17, some 2,449% ahead of expectations. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the consensus forecast from LeMaitre Vascular's five analysts is for revenues of US$120.8m in 2020, which would reflect a modest 5.4% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to descend 15% to US$0.69 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$105.1m and earnings per share (EPS) of US$0.53 in 2020. There has definitely been an improvement in perception after these results, with the analysts noticeably increasing both their earnings and revenue estimates.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 11% to US$34.43per share. 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. There are some variant perceptions on LeMaitre Vascular, with the most bullish analyst valuing it at US$41.00 and the most bearish at US$28.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await LeMaitre Vascular shareholders.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that LeMaitre Vascular's revenue growth is expected to slow, with forecast 5.4% increase next year well below the historical 9.4%p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.7% per year. Factoring in the forecast slowdown in growth, it seems obvious that LeMaitre Vascular is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards LeMaitre Vascular following these results. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider 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. At Simply Wall St, we have a full range of analyst estimates for LeMaitre Vascular going out to 2022, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 3 warning signs for LeMaitre Vascular that you should be aware of.
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.
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