AU$3.20: That's What Analysts Think Genetic Signatures Limited (ASX:GSS) Is Worth After Its Latest Results

It's been a good week for Genetic Signatures Limited (ASX:GSS) shareholders, because the company has just released its latest half-year results, and the shares gained 5.0% to AU$1.80. The analyst 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. So we gathered the latest post-earnings forecasts to see what estimate suggests is in store for next year.

See our latest analysis for Genetic Signatures

Taking into account the latest results, the most recent consensus for Genetic Signatures from single analyst is for revenues of AU$33.5m in 2021 which, if met, would be a notable 15% increase on its sales over the past 12 months. Per-share earnings are expected to swell 11% to AU$0.037. In the lead-up to this report, the analyst had been modelling revenues of AU$34.5m and earnings per share (EPS) of AU$0.051 in 2021. The analyst seem less optimistic after the recent results, reducing their sales forecasts and making a pretty serious reduction to earnings per share numbers.

It'll come as no surprise then, to learn that the analyst has cut their price target 7.2% to AU$3.20.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Genetic Signatures' revenue growth is expected to slow, with forecast 15% increase next year well below the historical 43%p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 13% next year. Factoring in the forecast slowdown in growth, it looks like Genetic Signatures is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Genetic Signatures. Sadly, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of Genetic Signatures' future valuation.

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 2023, which can be seen for free on our platform here.

Before you take the next step you should know about the 2 warning signs for Genetic Signatures that we have uncovered.

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