There's been a major selloff in Ekso Bionics Holdings, Inc. (NASDAQ:EKSO) shares in the week since it released its yearly report, with the stock down 21% to US$0.30. The statutory results were not great - while revenues of US$14m were in line with expectations,Ekso Bionics Holdings lost US$0.17 a share in the process. Following the result, 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. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.
Following the latest results, Ekso Bionics Holdings's three analysts are now forecasting revenues of US$17.8m in 2020. This would be a substantial 28% improvement in sales compared to the last 12 months. Statutory losses are forecast to narrow 6.7% to US$0.18 per share. Before this earnings announcement, analysts had been forecasting revenues of US$17.8m and losses of US$0.28 per share in 2020. Although the revenue estimates have not really changed, we can see there's been a considerable lift to earnings per share expectations, suggesting that analysts have become more bullish after the latest result.
Even with the lower forecast losses, analysts lowered their valuations, with the average price target falling 59% to US$1.43. It looks like analysts have become less optimistic about the overall business. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Ekso Bionics Holdings, with the most bullish analyst valuing it at US$2.10 and the most bearish at US$1.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
In addition, we can look to Ekso Bionics Holdings's past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. Analysts are definitely expecting Ekso Bionics Holdings's growth to accelerate, with the forecast 28% growth ranking favourably alongside historical growth of 8.7% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.7% per year. It seems obvious that, while the growth outlook is brighter than the recent past, analysts also expect Ekso Bionics Holdings to grow faster than the wider market.
The Bottom Line
The most important thing to note from these estimates is that the consensus increased its forecast losses next year, suggesting all may not be well at Ekso Bionics Holdings. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by the latest results, leading to a lower estimate of Ekso Bionics Holdings's future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on Ekso Bionics Holdings. Long-term earnings power is much more important than next year's profits. We have forecasts for Ekso Bionics Holdings going out to 2024, and you can see them free on our platform here.
We also provide an overview of the Ekso Bionics Holdings Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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