LiqTech International, Inc. (NASDAQ:LIQT) Analysts Are Cutting Their Estimates: Here's What You Need To Know
It's been a sad week for LiqTech International, Inc. (NASDAQ:LIQT), who've watched their investment drop 15% to US$4.83 in the week since the company reported its quarterly result. Revenues came in at US$4.0m, in line with expectations, while statutory losses per share were substantially higher than expected, at US$0.14 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. 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 LiqTech International
Taking into account the latest results, the most recent consensus for LiqTech International from three analysts is for revenues of US$26.1m in 2021 which, if met, would be a huge 67% increase on its sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 39% to US$0.37. Before this earnings announcement, the analysts had been modelling revenues of US$42.1m and losses of US$0.29 per share in 2021. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.
The average price target fell 15% to US$9.67, implicitly signalling that lower earnings per share are a leading indicator for LiqTech International's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on LiqTech International, with the most bullish analyst valuing it at US$15.00 and the most bearish at US$6.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that LiqTech International's rate of growth is expected to accelerate meaningfully, with the forecast 179% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 14% p.a. 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 7.8% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect LiqTech International to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. They also downgraded their revenue estimates, although industry data suggests that LiqTech International's revenues are expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of LiqTech International's future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for LiqTech International going out to 2023, and you can see them free on our platform here.
It is also worth noting that we have found 1 warning sign for LiqTech International that you need to take into consideration.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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