QuidelOrtho Corporation Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected

Investors in QuidelOrtho Corporation (NASDAQ:QDEL) had a good week, as its shares rose 5.7% to close at US$91.39 following the release of its yearly results. Results look mixed - while revenue fell marginally short of analyst estimates at US$3.3b, statutory earnings beat expectations 2.3%, with QuidelOrtho reporting profits of US$9.56 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for QuidelOrtho

After the latest results, the consensus from QuidelOrtho's seven analysts is for revenues of US$2.93b in 2023, which would reflect an uneasy 10% decline in sales compared to the last year of performance. Statutory earnings per share are expected to dive 69% to US$2.58 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$2.81b and earnings per share (EPS) of US$2.60 in 2023. There doesn't appear to have been a major change in sentiment following the results, other than the small lift in revenue estimates.

It may not be a surprise to see thatthe analysts have reconfirmed their price target of US$124, implying that the uplift in sales is not expected to greatly contribute to QuidelOrtho's valuation in the near term. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on QuidelOrtho, with the most bullish analyst valuing it at US$173 and the most bearish at US$87.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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 sales are expected to reverse, with a forecast 10% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 45% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 7.5% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - QuidelOrtho is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple QuidelOrtho analysts - going out to 2025, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 4 warning signs with QuidelOrtho (at least 2 which are significant) , and understanding these should be part of your investment process.

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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.