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It's been a mediocre week for Silk Road Medical, Inc (NASDAQ:SILK) shareholders, with the stock dropping 15% to US$39.79 in the week since its latest annual results. Revenues of US$63m arrived in line with expectations, although statutory losses per share were US$2.28, an impressive 25% smaller than what broker models predicted. 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 Silk Road Medical after the latest results.
Taking into account the latest results, the most recent consensus for Silk Road Medical from three analysts is for revenues of US$94.1m in 2020, which is a huge 49% increase on its sales over the past 12 months. Statutory losses are forecast to balloon 60% to US$0.92 per share. Before this latest report, the consensus had been expecting revenues of US$98.3m and US$0.89 per share in losses. Although analysts have lowered their sales forecasts, they've also made a their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.
The average analyst price target was broadly unchanged at US$50.50, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. 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. Currently, the most bullish analyst values Silk Road Medical at US$52.00 per share, while the most bearish prices it at US$48.00. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Silk Road Medical's performance in recent years. We would highlight that Silk Road Medical's revenue growth is expected to slow, with forecast 49% increase next year well below the historical 83%p.a. growth over the last year. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.7% next year. So it's pretty clear that, while Silk Road Medical's revenue growth is expected to slow, it's still expected to grow faster than the market itself.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses next year, perhaps suggesting Silk Road Medical is moving incrementally towards profitability. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider market. 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.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Silk Road Medical analysts - going out to 2022, 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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned.
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