Party Time: Brokers Just Made Major Increases To Their Conformis, Inc. (NASDAQ:CFMS) Earnings Forecasts

Celebrations may be in order for Conformis, Inc. (NASDAQ:CFMS) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

Following the upgrade, the consensus from four analysts covering Conformis is for revenues of US$96m in 2021, implying a perceptible 7.0% decline in sales compared to the last 12 months. Statutory earnings per share are anticipated to dive 94% to US$0.0077 in the same period. However, before this estimates update, the consensus had been expecting revenues of US$84m and US$0.18 per share in losses. It looks like there's been a definite improvement in business conditions, with a revenue upgrade supposed to lead to profitability sooner than previously forecast.

See our latest analysis for Conformis

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 13% annualised revenue decline to the end of 2021. That is a notable change from historical growth of 0.2% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.5% annually for the foreseeable future. It's pretty clear that Conformis' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that there is now an expectation for Conformis to become profitable this year, compared to previous expectations of a loss. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. The clear improvement in sentiment should be enough to get most shareholders feeling more optimistic about Conformis' future.

Analysts are definitely bullish on Conformis, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including recent substantial insider selling. You can learn more, and discover the 2 other warning signs we've identified, for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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