Analysts Have Been Trimming Their Repro Med Systems, Inc. (NASDAQ:KRMD) Price Target After Its Latest Report

Simply Wall St
August 13, 2021
Source: Shutterstock

Last week, you might have seen that Repro Med Systems, Inc. (NASDAQ:KRMD) released its quarterly result to the market. The early response was not positive, with shares down 4.2% to US$3.43 in the past week. Revenues of US$5.5m beat expectations by a respectable 6.1%, although statutory losses per share increased. Repro Med Systems lost US$0.03, which was 50% more than what the analysts had included in their models. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Repro Med Systems

NasdaqCM:KRMD Earnings and Revenue Growth August 14th 2021

Taking into account the latest results, the consensus forecast from Repro Med Systems' three analysts is for revenues of US$22.0m in 2021, which would reflect a credible 4.3% improvement in sales compared to the last 12 months. Losses are forecast to balloon 43% to US$0.097 per share. Before this latest report, the consensus had been expecting revenues of US$21.9m and US$0.087 per share in losses. So it's pretty clear the analysts have mixed opinions on Repro Med Systems even after this update; although they reconfirmed their revenue numbers, it came at the cost of a considerable increase in per-share losses.

With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 6.1% to US$5.17, with the analysts signalling that growing losses would be a definite concern. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Repro Med Systems analyst has a price target of US$7.00 per share, while the most pessimistic values it at US$3.50. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Repro Med Systems' revenue growth is expected to slow, with the forecast 8.7% annualised growth rate until the end of 2021 being well below the historical 14% 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) 8.4% annually. So it's pretty clear that, while Repro Med Systems' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall 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 Repro Med Systems. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Repro Med Systems going out to 2023, and you can see them free on our platform here..

Before you take the next step you should know about the 1 warning sign for Repro Med Systems that we have uncovered.

If you’re looking to trade Repro Med Systems, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.