Treace Medical Concepts, Inc. (NASDAQ:TMCI) Just Reported And Analysts Have Been Lifting Their Price Targets
Last week, you might have seen that Treace Medical Concepts, Inc. (NASDAQ:TMCI) released its full-year result to the market. The early response was not positive, with shares down 6.6% to US$13.44 in the past week. The results overall were pretty much dead in line with analyst forecasts; revenues were US$187m and statutory losses were US$0.81 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Treace Medical Concepts
After the latest results, the seven analysts covering Treace Medical Concepts are now predicting revenues of US$222.8m in 2024. If met, this would reflect a notable 19% improvement in revenue compared to the last 12 months. Losses are expected to increase substantially, hitting US$0.93 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$223.1m and losses of US$0.58 per share in 2024. While this year's revenue estimates held steady, there was also a sizeable expansion in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
Despite expectations of heavier losses next year,the analysts have lifted their price target 5.7% to US$15.86, perhaps implying these losses are not expected to be recurring over the long term. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Treace Medical Concepts, with the most bullish analyst valuing it at US$18.00 and the most bearish at US$14.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Treace Medical Concepts' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 19% growth on an annualised basis. This is compared to a historical growth rate of 37% over the past three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.8% annually. So it's pretty clear that, while Treace Medical Concepts' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still 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.
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 Treace Medical Concepts analysts - going out to 2026, and you can see them free on our platform here.
You still need to take note of risks, for example - Treace Medical Concepts has 1 warning sign we think you should be aware of.
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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.
