Quidel Corporation (NASDAQ:QDEL) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year’s forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance. Investors have been pretty optimistic on Quidel too, with the stock up 11% to US$282 over the past week. We’ll be curious to see if these new estimates convince the market to lift the stock price higher still.
Following the upgrade, the most recent consensus for Quidel from its five analysts is for revenues of US$1.3b in 2020 which, if met, would be a sizeable 91% increase on its sales over the past 12 months. Per-share earnings are expected to leap 204% to US$11.23. Previously, the analysts had been modelling revenues of US$951m and earnings per share (EPS) of US$6.19 in 2020. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.
It will come as no surprise to learn that the analysts have increased their price target for Quidel 26% to US$300 on the back of these upgrades. 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 Quidel analyst has a price target of US$363 per share, while the most pessimistic values it at US$158. This is a fairly broad spread of estimates, suggesting that the 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. It’s clear from the latest estimates that Quidel’s rate of growth is expected to accelerate meaningfully, with the forecast 91% revenue growth noticeably faster than its historical growth of 28% p.a. 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 10% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Quidel to grow faster than the wider industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Quidel could be worth investigating further.
Still, the long-term prospects of the business are much more relevant than next year’s earnings. At Simply Wall St, we have a full range of analyst estimates for Quidel going out to 2022, and you can see them free on our platform here..
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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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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