Last week saw the newest annual earnings release from Sensus Healthcare, Inc. (NASDAQ:SRTS), an important milestone in the company's journey to build a stronger business. It was a pretty bad result overall; while revenues were in line with expectations at US$27m, statutory losses exploded to US$0.10 per share. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on Sensus Healthcare after the latest results.
Taking into account the latest results, the most recent consensus for Sensus Healthcare from six analysts is for revenues of US$31.4m in 2020, which is a solid 15% increase on its sales over the past 12 months. Earnings are expected to improve, with Sensus Healthcare forecast to report a statutory profit of US$0.062 per share. Before this earnings report, analysts had been forecasting revenues of US$33.1m and earnings per share (EPS) of US$0.023 in 2020. While revenue forecasts have been revised downwards, analysts look to have become more optimistic on the company's earnings power, given the great increase in to earnings per share forecasts.
There's been no real change to the average price target of US$7.75, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. The most optimistic Sensus Healthcare analyst has a price target of US$10.00 per share, while the most pessimistic values it at US$5.50. 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 Sensus Healthcare shareholders.
Further, we can compare these estimates to past performance, and see how Sensus Healthcare forecasts compare to the wider market's forecast performance. It's pretty clear that analysts expect Sensus Healthcare's revenue growth will slow down substantially, with revenues next year expected to grow 15%, compared to a historical growth rate of 26% over the past five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 7.9% next year. Even after the forecast slowdown in growth, it seems obvious that analysts still thinkSensus Healthcare will grow faster than the wider market.
The Bottom Line
The most important thing to take away from this is that analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Sensus Healthcare following these results. Unfortunately analysts also downgraded their revenue estimates, although industry data suggests that Sensus Healthcare's revenues are expected to grow faster than the wider market. Even so, earnings per share are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Sensus Healthcare. Long-term earnings power is much more important than next year's profits. We have forecasts for Sensus Healthcare going out to 2021, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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