Northern Technologies International Corporation (NASDAQ:NTIC) just released its quarterly report and things are looking bullish. The company beat both earnings and revenue forecasts, with revenue of US$13m, some 6.5% above estimates, and statutory earnings per share (EPS) coming in at US$0.13, 160% ahead of expectations. The analyst 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 estimate to see what could be in store for next year.
Taking into account the latest results, the consensus forecast from Northern Technologies International's one analyst is for revenues of US$50.1m in 2021, which would reflect a decent 9.4% improvement in sales compared to the last 12 months. Northern Technologies International is also expected to turn profitable, with statutory earnings of US$0.36 per share. Yet prior to the latest earnings, the analyst had been anticipated revenues of US$50.1m and earnings per share (EPS) of US$0.36 in 2021. So it's pretty clear that, although the analyst has updated their estimates, there's been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$15.50.
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 analyst, with revenue forecast to grow 9.4%, in line with its 12% annual growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 5.7% next year. So although Northern Technologies International is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analyst reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still 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.
With that in mind, we wouldn't be too quick to come to a conclusion on Northern Technologies International. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2022, which can be seen for free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for Northern Technologies International you should know about.
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