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As you might know, Mitek Systems, Inc. (NASDAQ:MITK) just kicked off its latest quarterly results with some very strong numbers. It was overall a positive result, with revenues beating expectations by 2.8% to hit US$26m. Mitek Systems also reported a statutory profit of US$0.05, which was an impressive 67% above what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Mitek Systems after the latest results.
Taking into account the latest results, the current consensus from Mitek Systems' five analysts is for revenues of US$115.5m in 2021, which would reflect a notable 9.8% increase on its sales over the past 12 months. Statutory earnings per share are forecast to decrease 4.4% to US$0.21 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$115.9m and earnings per share (EPS) of US$0.25 in 2021. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a substantial drop in EPS estimates.
Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 45% to US$19.75, suggesting the revised estimates are not indicative of a weaker long-term future for the business. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Mitek Systems at US$25.00 per share, while the most bearish prices it at US$16.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Mitek Systems shareholders.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Mitek Systems' revenue growth is expected to slow, with forecast 9.8% increase next year well below the historical 27%p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 13% next year. Factoring in the forecast slowdown in growth, it seems obvious that Mitek Systems is also expected to grow slower than other industry participants.
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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Mitek Systems' revenues are expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on Mitek Systems. Long-term earnings power is much more important than next year's profits. We have forecasts for Mitek Systems going out to 2022, and you can see them free on our platform here.
It is also worth noting that we have found 4 warning signs for Mitek Systems that you need to take into consideration.
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. 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.
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