Results: Merit Medical Systems, Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts

A week ago, Merit Medical Systems, Inc. (NASDAQ:MMSI) came out with a strong set of first-quarter numbers that could potentially lead to a re-rate of the stock. Merit Medical Systems beat earnings, with revenues hitting US$324m, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 14%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Merit Medical Systems

Taking into account the latest results, the current consensus from Merit Medical Systems' ten analysts is for revenues of US$1.32b in 2024. This would reflect a satisfactory 3.1% increase on its revenue over the past 12 months. Per-share earnings are expected to jump 27% to US$2.23. Before this earnings report, the analysts had been forecasting revenues of US$1.32b and earnings per share (EPS) of US$2.19 in 2024. So the consensus seems to have become somewhat more optimistic on Merit Medical Systems' earnings potential following these results.

There's been no major changes to the consensus price target of US$92.00, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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. There are some variant perceptions on Merit Medical Systems, with the most bullish analyst valuing it at US$107 and the most bearish at US$80.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Merit Medical Systems' revenue growth is expected to slow, with the forecast 4.2% annualised growth rate until the end of 2024 being well below the historical 6.5% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.1% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Merit Medical Systems.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Merit Medical Systems' earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Merit Medical Systems' revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$92.00, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Merit Medical 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 Merit Medical Systems going out to 2026, 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 Merit Medical Systems you should be aware of.

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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.