The third-quarter results for Accelerate Diagnostics, Inc. (NASDAQ:AXDX) were released last week, making it a good time to revisit its performance. The business exceeded revenue expectations with sales of US$3.6m coming in 9.9% ahead of forecasts. Statutory losses were US$0.33 a share, in line with what the analysts predicted. Earnings are an important time for investors, as they can track a company’s performance, look at what the analysts are forecasting for next year, and see if there’s been a change in sentiment towards the company. With this in mind, we’ve gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the current consensus from Accelerate Diagnostics’ five analysts is for revenues of US$23.4m in 2021, which would reflect a major 130% increase on its sales over the past 12 months. Losses are supposed to decline, shrinking 15% from last year to US$1.28. Before this earnings announcement, the analysts had been modelling revenues of US$24.6m and losses of US$1.30 per share in 2021.
The analysts have cut their price target 6.3% to US$15.00per share, signalling that the declining revenue and ongoing losses are contributing to the lower valuation. 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. Currently, the most bullish analyst values Accelerate Diagnostics at US$20.00 per share, while the most bearish prices it at US$10.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Accelerate Diagnostics’ growth to accelerate, with the forecast 130% growth ranking favourably alongside historical growth of 58% 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 9.9% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Accelerate Diagnostics to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates – from multiple Accelerate Diagnostics analysts – going out to 2022, and you can see them free on our platform here.
You should always think about risks though. Case in point, we’ve spotted 3 warning signs for Accelerate Diagnostics 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.