Northern Technologies International Corporation Released Earnings Last Week And Analysts Lifted Their Price Target To US$16.00
It's been a good week for Northern Technologies International Corporation (NASDAQ:NTIC) shareholders, because the company has just released its latest first-quarter results, and the shares gained 2.7% to US$14.15. Revenues came in 2.5% below expectations, at US$15m. Statutory earnings per share were relatively better off, with a per-share profit of US$0.13 being roughly in line with analyst estimates. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Northern Technologies International
After the latest results, the one analyst covering Northern Technologies International are now predicting revenues of US$62.5m in 2020. If met, this would reflect a meaningful 11% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to expand 20% to US$0.65. Yet prior to the latest earnings, analysts had been forecasting revenues of US$63.3m and earnings per share (EPS) of US$0.60 in 2020. So the consensus seems to have become somewhat more optimistic on Northern Technologies International's earnings potential following these results.
Analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 113% to US$16.00.
Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. We would highlight that Northern Technologies International's revenue growth is expected to slow, with forecast 11% increase next year well below the historical 16%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 3.5% next year. Even after the forecast slowdown in growth, it seems obvious that analysts still thinkNorthern Technologies International will grow faster than the wider market.
The Bottom Line
The most important thing to take away from this is that analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Northern Technologies International following these results. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. Analysts also upgraded their price target, suggesting that analysts believe the intrinsic value of the business is likely to improve over time.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2021, which can be seen for 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.
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