Here's What Analysts Are Forecasting For Aroa Biosurgery Limited (ASX:ARX) After Its Annual Results

Investors in Aroa Biosurgery Limited (ASX:ARX) had a good week, as its shares rose 6.2% to close at AU$1.20 following the release of its annual results. Sales hit NZ$22m in line with forecasts, although the company reported a statutory loss per share of NZ$0.064 that was somewhat smaller than the analysts expected. 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.

See our latest analysis for Aroa Biosurgery

Following the latest results, Aroa Biosurgery's two analysts are now forecasting revenues of NZ$31.1m in 2022. This would be a huge 39% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 53% to NZ$0.03. Before this earnings announcement, the analysts had been modelling revenues of NZ$31.5m and losses of NZ$0.017 per share in 2022. While this year's revenue estimates held steady, there was also a very substantial increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

The consensus price target held steady at NZ$5.24, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Aroa Biosurgery's rate of growth is expected to accelerate meaningfully, with the forecast 39% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 15% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 10% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Aroa Biosurgery is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at NZ$5.24, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2024, which can be seen for 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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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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