Neuronetics, Inc. (NASDAQ:STIM) Full-Year Results: Here's What Analysts Are Forecasting For This Year
A week ago, Neuronetics, Inc. (NASDAQ:STIM) came out with a strong set of annual numbers that could potentially lead to a re-rate of the stock. It looks like a positive result overall, with revenues of US$51m beating forecasts by 6.6%. Statutory losses of US$1.46 per share were 6.6% smaller than the analysts expected, likely helped along by the higher revenues. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Neuronetics after the latest results.
See our latest analysis for Neuronetics
After the latest results, the five analysts covering Neuronetics are now predicting revenues of US$60.7m in 2021. If met, this would reflect a decent 19% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 43% to US$0.96. Before this earnings announcement, the analysts had been modelling revenues of US$62.5m and losses of US$0.76 per share in 2021. So it's pretty clear the analysts have mixed opinions on Neuronetics after this update; revenues were downgraded and per-share losses expected to increase.
The average price target was broadly unchanged at US$22.50, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the 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. The most optimistic Neuronetics analyst has a price target of US$25.00 per share, while the most pessimistic values it at US$21.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Neuronetics is an easy business to forecast or the the analysts are all using similar assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Neuronetics' past performance and to peers in the same industry. The analysts are definitely expecting Neuronetics' growth to accelerate, with the forecast 19% annualised growth to the end of 2021 ranking favourably alongside historical growth of 11% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.0% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Neuronetics to grow faster than the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Neuronetics. They also downgraded their revenue estimates, although industry data suggests that Neuronetics' revenues are expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Neuronetics going out to 2023, and you can see them free on our platform here..
Before you take the next step you should know about the 4 warning signs for Neuronetics that we have uncovered.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
