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The investors in Summit Wireless Technologies, Inc.'s (NASDAQ:WISA) will be rubbing their hands together with glee today, after the share price leapt 29% to US$2.53 in the week following its third-quarter results. Revenues came in 21% better than analyst models expected, at US$607k, although statutory losses ballooned 30% to US$0.39, which is much worse than what was forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following the latest results, Summit Wireless Technologies' two analysts are now forecasting revenues of US$6.70m in 2021. This would be a substantial 273% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 70% to US$1.14. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$6.70m and losses of US$1.12 per share in 2021.
The average price target fell 6.3% to US$8.50, with the ongoing losses seemingly a concern for the analysts, despite the lack of real change to the earnings forecasts.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Summit Wireless Technologies' past performance and to peers in the same industry. It's clear from the latest estimates that Summit Wireless Technologies' rate of growth is expected to accelerate meaningfully, with the forecast 273% revenue growth noticeably faster than its historical growth of 3.0%p.a. 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 9.4% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Summit Wireless Technologies is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Summit Wireless Technologies going out as far as 2024, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 6 warning signs for Summit Wireless Technologies (1 is concerning!) that you should be aware of.
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. 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.
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