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Last week, you might have seen that AtriCure, Inc. (NASDAQ:ATRC) released its yearly result to the market. The early response was not positive, with shares down 2.0% to US$42.17 in the past week. The results overall were pretty much dead in line with analyst forecasts; revenues were US$231m and statutory losses were US$0.94 per share. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.
Following the latest results, AtriCure's seven analysts are now forecasting revenues of US$258.6m in 2020. This would be a solid 12% improvement in sales compared to the last 12 months. The statutory loss per share is expected to greatly reduce in the near future, narrowing 50% to US$1.41. Yet prior to the latest earnings, analysts had been forecasting revenues of US$258.6m and losses of US$1.08 per share in 2020. Analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.
Although analysts are now forecasting higher losses, the average analyst price target rose 20% to 41.28571, which could indicate that these losses are expected to be "one-off", or analysts think they won't have a longer-term impact on the business. 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 AtriCure at US$52.00 per share, while the most bearish prices it at US$47.00. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. Next year brings more of the same, according to analysts, with revenue forecast to grow 12%, in line with its 15% 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 7.9% per year. So it's pretty clear that AtriCure is forecast to grow substantially faster than its market.
The Bottom Line
The most important thing to take away is that analysts reconfirmed their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. Analysts also upgraded their price target, suggesting that analysts believe the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on AtriCure. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple AtriCure analysts - going out to 2023, and you can see them free on our platform here.
We also provide an overview of the AtriCure Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, 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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