EDAP TMS S.A. (NASDAQ:EDAP) Just Reported Full-Year Earnings And Analysts Are Lifting Their Estimates

EDAP TMS S.A. (NASDAQ:EDAP) just released its latest full-year report and things are not looking great. Revenues missed expectations somewhat, coming in at US$38m, but statutory earnings fell catastrophically short, with a loss of US$0.058 some 331% larger than what the analysts had predicted. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for EDAP TMS

After the latest results, the three analysts covering EDAP TMS are now predicting revenues of US$57.6m in 2021. If met, this would reflect a huge 51% improvement in sales compared to the last 12 months. EDAP TMS is also expected to turn profitable, with statutory earnings of US$0.14 per share. Before this earnings report, the analysts had been forecasting revenues of US$52.8m and earnings per share (EPS) of US$0.11 in 2021. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a considerable lift to earnings per share in particular.

It will come as no surprise to learn that the analysts have increased their price target for EDAP TMS 5.3% to US$13.33on the back of these upgrades. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic EDAP TMS analyst has a price target of US$15.00 per share, while the most pessimistic values it at US$10.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await EDAP TMS shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the EDAP TMS' past performance and to peers in the same industry. The analysts are definitely expecting EDAP TMS' growth to accelerate, with the forecast 51% annualised growth to the end of 2021 ranking favourably alongside historical growth of 5.1% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 8.9% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect EDAP TMS to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards EDAP TMS following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on EDAP TMS. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple EDAP TMS analysts - going out to 2025, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for EDAP TMS you should be aware of.

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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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