Mitek Systems, Inc. (NASDAQ:MITK) just released its annual report and things are looking bullish. The company beat both earnings and revenue forecasts, with revenue of US$101m, some 3.9% above estimates, and statutory earnings per share (EPS) coming in at US$0.18, 54% 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the consensus forecast from Mitek Systems' four analysts is for revenues of US$115.9m in 2021, which would reflect a meaningful 14% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to soar 20% to US$0.23. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$115.6m and earnings per share (EPS) of US$0.23 in 2021. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 20% to US$16.33, suggesting the revised estimates are not indicative of a weaker long-term future for the business. 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. Currently, the most bullish analyst values Mitek Systems at US$16.00 per share, while the most bearish prices it at US$14.00. This is a very narrow spread of estimates, implying either that Mitek Systems is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
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 Mitek Systems' revenue growth is expected to slow, with forecast 14% increase next year well below the historical 27%p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 13% next year. So it's pretty clear that, while Mitek Systems' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Mitek Systems going out to 2022, and you can see them free on our platform here.
It is also worth noting that we have found 4 warning signs for Mitek Systems that you need to take into consideration.
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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