Results: Cogstate Limited Exceeded Expectations And The Consensus Has Updated Its Estimates
Cogstate Limited (ASX:CGS) defied analyst predictions to release its full-year results, which were ahead of market expectations. The company beat forecasts, with revenue of US$40m, some 5.2% above estimates, and statutory earnings per share (EPS) coming in at US$0.021, 62% ahead of expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Check out our latest analysis for Cogstate
Taking into account the latest results, the most recent consensus for Cogstate from three analysts is for revenues of US$47.5m in 2024. If met, it would imply a solid 17% increase on its revenue over the past 12 months. Per-share earnings are expected to jump 54% to US$0.032. Before this earnings report, the analysts had been forecasting revenues of US$49.0m and earnings per share (EPS) of US$0.035 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.
The consensus price target fell 11% to AU$1.67, with the weaker earnings outlook clearly leading valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Cogstate analyst has a price target of AU$2.10 per share, while the most pessimistic values it at AU$1.31. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Cogstate's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Cogstate'shistorical trends, as the 17% annualised revenue growth to the end of 2024 is roughly in line with the 15% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 19% annually. It's clear that while Cogstate's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
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 estimates - from multiple Cogstate analysts - going out to 2026, and you can see them free on our platform here.
It is also worth noting that we have found 2 warning signs for Cogstate (1 is concerning!) that you need to take into consideration.
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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.
