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It's shaping up to be a tough period for Motus GI Holdings, Inc. (NASDAQ:MOTS), which a week ago released some disappointing first-quarter results that could have a notable impact on how the market views the stock. It looks to have been a weak result overall, as sales of US$28k were 78% less than the analysts expected. Unsurprisingly, losses were also somewhat larger than was modelled, at US$0.23 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the most recent consensus for Motus GI Holdings from six analysts is for revenues of US$652.2k in 2020 which, if met, would be a sizeable 387% increase on its sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 23% to US$0.66. Before this earnings announcement, the analysts had been modelling revenues of US$1.04m and losses of US$0.59 per share in 2020. 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 consensus price target fell 48% to US$2.82, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Motus GI Holdings analyst has a price target of US$3.50 per share, while the most pessimistic values it at US$1.65. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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. Next year brings more of the same, according to the analysts, with revenue forecast to grow 4x, in line with its 441% annual growth over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 9.8% per year. So it's pretty clear that Motus GI Holdings is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
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 Motus GI Holdings going out to 2024, and you can see them free on our platform here.
You still need to take note of risks, for example - Motus GI Holdings has 6 warning signs (and 2 which are concerning) we think you should know about.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned.
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