Quotient Limited (NASDAQ:QTNT) shares fell 6.8% to US$7.46 in the week since its latest quarterly results. The business exceeded revenue expectations with sales of US$7.9m coming in 9.8% ahead of forecasts. Statutory losses were US$0.37 a share, in line with what analysts predicted. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.
Following the latest results, Quotient's three analysts are now forecasting revenues of US$33.0m in 2021. This would be an okay 2.4% improvement in sales compared to the last 12 months. Statutory losses are forecast to balloon 20% to US$1.23 per share. Yet prior to the latest earnings, analysts had been forecasting revenues of US$33.0m and losses of US$1.21 per share in 2021. There was no real change to the revenue estimates, but analysts do seem more bullish on earnings, given the earnings per share expectations following these results.
As a result there was no major change to the consensus price target of US$13.50, implying that the business is trading roughly in line with analyst expectations despite ongoing losses. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Quotient analyst has a price target of US$14.00 per share, while the most pessimistic values it at US$13.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the Quotient's past performance and to peers in the same market. We would highlight that Quotient's revenue growth is expected to slow, with forecast 2.4% increase next year well below the historical 13%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 7.9% per year. Factoring in the forecast slowdown in growth, it seems obvious that analysts still expect Quotient to grow slower than the wider market.
The Bottom Line
The most important thing to note from these estimates is that the consensus increased its forecast losses next year, suggesting all may not be well at Quotient. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. 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 Quotient. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Quotient going out to 2022, and you can see them free on our platform here..
You can also see whether Quotient is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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