Last week, you might have seen that OraSure Technologies, Inc. (NASDAQ:OSUR) released its quarterly result to the market. The early response was not positive, with shares down 6.1% to US$8.28 in the past week. Revenues of US$36m fell slightly short of expectations, but earnings were a definite bright spot, with per-share profits of US$0.21 an impressive 125% ahead of estimates. 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. Readers will be glad to know we’ve aggregated the latest forecasts to see whether analysts have changed their mind on OraSure Technologies after the latest results.
After the latest results, the three analysts covering OraSure Technologies are now predicting revenues of US$169m in 2020. If met, this would reflect a modest 7.6% improvement in sales compared to the last 12 months. Earnings per share are expected to plummet 38% to US$0.24 in the same period. Before this earnings report, analysts had been forecasting revenues of US$175m and earnings per share (EPS) of US$0.28 in 2020. Analysts seem less optimistic after the recent results, reducing their sales forecasts and making a real cut to earnings per share forecasts.
The average price target climbed 6.7% to US$8.00 despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on OraSure Technologies, with the most bullish analyst valuing it at US$8.00 and the most bearish at US$8.00 per share. 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 we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether analysts are more or less bullish relative to other companies in the market. We would highlight that OraSure Technologies’s revenue growth is expected to slow, with forecast 7.6% increase next year well below the historical 11%p.a. growth over the last five years. Compare this to the 259 other companies in this market with analyst coverage, which are forecast to grow their revenue at 8.2% per year. Factoring in the forecast slowdown in growth, it looks like analysts are expecting OraSure Technologies to grow at about the same rate as the wider market.
The Bottom Line
The biggest highlight of the new consensus is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for OraSure Technologies. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. Analysts also upgraded their price target, suggesting that analysts believe 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. At Simply Wall St, we have a full range of analyst estimates for OraSure Technologies going out to 2021, and you can see them free on our platform here..
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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If you spot an error that warrants correction, please contact the editor at email@example.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. Thank you for reading.