Earnings Release: Here's Why Analysts Cut Their CVRx, Inc. (NASDAQ:CVRX) Price Target To US$20.33

There's been a notable change in appetite for CVRx, Inc. (NASDAQ:CVRX) shares in the week since its annual report, with the stock down 14% to US$7.62. The statutory results were mixed overall, with revenues of US$13m in line with analyst forecasts, but losses of US$4.16 per share, some 2.3% larger than the analysts were predicting. The 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 statutory forecasts to see whether the analysts have changed their mind on CVRx after the latest results.

View our latest analysis for CVRx

Following the latest results, CVRx's four analysts are now forecasting revenues of US$20.8m in 2022. This would be a major 60% improvement in sales compared to the last 12 months. Losses are expected to hold steady at around US$2.11. Before this latest report, the consensus had been expecting revenues of US$20.8m and US$1.81 per share in losses. So it's pretty clear the analysts have mixed opinions on CVRx even after this update; although they reconfirmed their revenue numbers, it came at the cost of a notable increase in per-share losses.

The consensus price target fell 9.0% to US$20.33per share, with the analysts clearly concerned by ballooning losses. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on CVRx, with the most bullish analyst valuing it at US$24.00 and the most bearish at US$17.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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 forecasts are more or less bullish relative to other companies in the industry. We would highlight that CVRx's revenue growth is expected to slow, with the forecast 60% annualised growth rate until the end of 2022 being well below the historical 115% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.2% per year. So it's pretty clear that, while CVRx's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at CVRx. Happily, there were no major changes to revenue forecasts, with the business still expected to 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.

With that in mind, we wouldn't be too quick to come to a conclusion on CVRx. Long-term earnings power is much more important than next year's profits. We have forecasts for CVRx going out to 2024, and you can see them free on our platform here.

Even so, be aware that CVRx is showing 2 warning signs in our investment analysis , you should know about...

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.