Quidel Corporation (NASDAQ:QDEL) just released its latest quarterly results and things are looking bullish. The company beat both earnings and revenue forecasts, with revenue of US$175m, some 8.8% above estimates, and statutory earnings per share (EPS) coming in at US$0.93, 29% 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following the latest results, Quidel's four analysts are now forecasting revenues of US$741.4m in 2020. This would be a sizeable 32% improvement in sales compared to the last 12 months. Per-share earnings are expected to leap 60% to US$3.42. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$564.6m and earnings per share (EPS) of US$2.16 in 2020. So we can see there's been a pretty clear increase in sentiment following the latest results, with both revenues and earnings per share receiving a decent lift in the latest estimates.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 61% to US$153 per share. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Quidel, with the most bullish analyst valuing it at US$170 and the most bearish at US$120 per share. 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.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. Next year brings more of the same, according to the analysts, with revenue forecast to grow 32%, in line with its 27% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 9.4% per year. So although Quidel is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Quidel following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Quidel analysts - going out to 2022, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 2 warning signs for Quidel that you should be aware of.
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