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US$8.83 - That's What Analysts Think Luna Innovations Incorporated Is Worth After These Results

Simply Wall St

It's been a pretty great week for Luna Innovations Incorporated (NASDAQ:LUNA) shareholders, with its shares surging 12% to US$7.49 in the week since its latest annual results. It was an okay report, and revenues came in at US$71m, approximately in line with analyst estimates leading up to the results announcement. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Luna Innovations

NasdaqCM:LUNA Past and Future Earnings, March 8th 2020

After the latest results, the three analysts covering Luna Innovations are now predicting revenues of US$81.9m in 2020. If met, this would reflect a decent 16% improvement in sales compared to the last 12 months. Before this earnings result, analysts had predicted US$79.9m revenue in 2020, although there was no accompanying EPS estimate. So there's been a pretty clear uptick in analyst sentiment after these results, given the small lift in next year's revenue forecasts.

Additionally, the consensus price target for Luna Innovations 17% to US$8.83, showing a clear increase in optimism from the analysts involved. 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. The most optimistic Luna Innovations analyst has a price target of US$10.00 per share, while the most pessimistic values it at US$7.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. It's clear from the latest estimates that Luna Innovations's rate of growth is expected to accelerate meaningfully, with forecast 16% revenue growth noticeably faster than its historical growth of 13%p.a. over the past five years. Compare this with other companies in the same market, which are forecast to grow their revenue 5.1% next year. It seems obvious that, while the growth outlook is brighter than the recent past, analysts also expect Luna Innovations to grow faster than the wider market.

The Bottom Line

The biggest takeaway for us from these new estimates is the bullish forecast for profits next year. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected 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.

We have estimates for Luna Innovations from its three analysts , and you can see them free on our platform here.

You can also see our analysis of Luna Innovations's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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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