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NanoString Technologies, Inc. Analysts Are Pretty Bullish On The Stock After Recent Results

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Simply Wall St
·4 min read
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It's been a good week for NanoString Technologies, Inc. (NASDAQ:NSTG) shareholders, because the company has just released its latest annual results, and the shares gained 7.3% to US$35.86. It was a pretty bad result overall; while revenues were in line with expectations at US$126m, statutory losses exploded to US$1.18 per share. 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.

Check out our latest analysis for NanoString Technologies

NasdaqGM:NSTG Past and Future Earnings, February 28th 2020
NasdaqGM:NSTG Past and Future Earnings, February 28th 2020

Taking into account the latest results, NanoString Technologies's five analysts currently expect revenues in 2020 to be US$127.6m, approximately in line with the last 12 months. Losses are predicted to fall substantially, shrinking 52% (on a statutory basis) to US$1.79. Yet prior to the latest earnings, analysts had been forecasting revenues of US$122.6m and losses of US$2.24 per share in 2020. There's been a pretty noticeable increase in sentiment, with analysts upgrading revenues and making a massive increase in earnings per share in particular

It will come as no surprise to learn that analysts have increased their price target for NanoString Technologies 7.1% to US$36.20 on the back of these upgrades. 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. Currently, the most bullish analyst values NanoString Technologies at US$40.00 per share, while the most bearish prices it at US$28.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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. We would highlight that NanoString Technologies's revenue growth is expected to slow, with forecast 1.6% increase next year well below the historical 18%p.a. growth over the last five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 7.5% per year. Factoring in the forecast slowdown in growth, it seems obvious that analysts still expect NanoString Technologies to grow slower than the wider market.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for next year. Fortunately, analysts also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider market. There was also a nice increase in the price target, with analysts feeling that the intrinsic value of the business is improving.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have forecasts for NanoString Technologies going out to 2023, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.