Investors in RADCOM Ltd. (NASDAQ:RDCM) had a good week, as its shares rose 4.1% to close at US$9.50 following the release of its annual results. The results don't look great, especially considering that statutory losses grew 19% toUS$0.50 per share. Revenues of US$33,010,000 did beat expectations by 4.7%, but it looks like a bit of a cold comfort. Analysts 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 gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.
Following the latest results, RADCOM's dual analysts are now forecasting revenues of US$35.3m in 2020. This would be a reasonable 7.0% improvement in sales compared to the last 12 months. Per-share statutory losses are expected to see a sharp uptick, reaching US$0.43. Yet prior to the latest earnings, analysts had been forecasting revenues of US$35.0m and losses of US$0.42 per share in 2020. 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.
It can also be useful to step back and take a broader view of how analyst forecasts compare to RADCOM's performance in recent years. We would highlight that RADCOM's revenue growth is expected to slow, with forecast 7.0% increase next year well below the historical 9.5%p.a. growth over the last five years. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.4% next year. So it's pretty clear that, while RADCOM's revenue growth is expected to slow, it's still expected to grow faster than the market itself.
The Bottom Line
The most important thing to take away is that analysts reconfirmed their loss per share estimates for next year. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that RADCOM's revenues are expected to grow faster than the wider market. There's no strong signal in the analyst revisions, but the market did not respond much to the updates, implying that the revisions roughly reflect the wider market consensus for RADCOM.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for RADCOM going out as far as 2021, and you can see them free on our platform here.
We also provide an overview of the RADCOM Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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