Rainbows and Unicorns: NeuroPace, Inc. (NASDAQ:NPCE) Analysts Just Became A Lot More Optimistic
Celebrations may be in order for NeuroPace, Inc. (NASDAQ:NPCE) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance. Investor sentiment seems to be improving too, with the share price up 8.4% to US$4.50 over the past 7 days. Could this big upgrade push the stock even higher?
Following the upgrade, the latest consensus from NeuroPace's five analysts is for revenues of US$60m in 2023, which would reflect a meaningful 9.6% improvement in sales compared to the last 12 months. Losses are forecast to narrow 3.4% to US$1.59 per share. However, before this estimates update, the consensus had been expecting revenues of US$53m and US$1.81 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.
Check out our latest analysis for NeuroPace
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that NeuroPace's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 20% growth on an annualised basis. This is compared to a historical growth rate of 28% over the past year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.9% per year. Even after the forecast slowdown in growth, it seems obvious that NeuroPace is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around NeuroPace's prospects. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. The clear improvement in sentiment should be enough to get most shareholders feeling more optimistic about NeuroPace's future.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple NeuroPace analysts - going out to 2025, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
