It's been a sad week for NeoGenomics, Inc. (NASDAQ:NEO), who've watched their investment drop 13% to US$28.36 in the week since the company reported its full-year result. It looks like a credible result overall - although revenues of US$409m were what analysts expected, NeoGenomics surprised by delivering a (statutory) profit of US$0.08 per share, an impressive 122% above what analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.
Taking into account the latest results, the latest consensus from NeoGenomics's six analysts is for revenues of US$468.7m in 2020, which would reflect a solid 15% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to surge 43% to US$0.11. Before this earnings report, analysts had been forecasting revenues of US$457.4m and earnings per share (EPS) of US$0.19 in 2020. So it's pretty clear analysts have mixed opinions on NeoGenomics after the latest results; even though they upped their revenue numbers, it came at the cost of a large cut to per-share earnings expectations.
Analysts also upgraded NeoGenomics's price target 6.8% to US$31.33, implying that the higher sales are expected to generate enough value to offset the forecast decline in earnings. 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 NeoGenomics, with the most bullish analyst valuing it at US$35.00 and the most bearish at US$28.00 per share. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
In addition, we can look to NeoGenomics's past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. It's pretty clear that analysts expect NeoGenomics's revenue growth will slow down substantially, with revenues next year expected to grow 15%, compared to a historical growth rate of 27% over the past five years. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.5% next year. So it's pretty clear that, while NeoGenomics's revenue growth is expected to slow, it's still expected to grow faster than the market itself.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for NeoGenomics. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow faster 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for NeoGenomics going out to 2022, 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 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.
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.