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Nova Measuring Instruments Ltd. (NASDAQ:NVMI) defied analyst predictions to release its quarterly results, which were ahead of market expectations. Nova Measuring Instruments beat earnings, with revenues hitting US$69m, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 16%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the consensus forecast from Nova Measuring Instruments' four analysts is for revenues of US$300.3m in 2021, which would reflect a notable 17% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to jump 28% to US$2.14. Before this earnings report, the analysts had been forecasting revenues of US$293.8m and earnings per share (EPS) of US$2.15 in 2021. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a slight bump in to revenue forecasts.
The consensus price target increased 7.4% to US$65.25, with an improved revenue forecast carrying the promise of a more valuable business, in time. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Nova Measuring Instruments, with the most bullish analyst valuing it at US$68.00 and the most bearish at US$60.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
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. The analysts are definitely expecting Nova Measuring Instruments' growth to accelerate, with the forecast 17% growth ranking favourably alongside historical growth of 11% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.4% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Nova Measuring Instruments is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
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. We have forecasts for Nova Measuring Instruments going out to 2021, and you can see them free on our platform here.
We also provide an overview of the Nova Measuring Instruments Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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.
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