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Last week, you might have seen that Quanterix Corporation (NASDAQ:QTRX) released its first-quarter result to the market. The early response was not positive, with shares down 3.5% to US$26.50 in the past week. Revenues were US$16m, and Quanterix came in a solid 18% ahead of expectations. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following last week's earnings report, Quanterix's five analysts are forecasting 2020 revenues to be US$59.6m, approximately in line with the last 12 months. Per-share losses are predicted to creep up to US$1.66. Before this latest report, the consensus had been expecting revenues of US$64.6m and US$1.55 per share in losses. Overall it looks as though the analysts are negative in this update. Although sales forecasts held steady, the consensus also made a to its losses per share forecasts.
There was no major change to the consensus price target of US$33.00, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. 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. Currently, the most bullish analyst values Quanterix at US$35.00 per share, while the most bearish prices it at US$30.00. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Quanterix's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast revenue decline of 0.9%, a significant reduction from annual growth of 40% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.7% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Quanterix is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$33.00, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Quanterix. Long-term earnings power is much more important than next year's profits. We have forecasts for Quanterix going out to 2024, and you can see them free on our platform here.
You still need to take note of risks, for example - Quanterix has 3 warning signs we think you should be aware of.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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.
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