Results: STAAR Surgical Company Exceeded Expectations And The Consensus Has Updated Its Estimates

STAAR Surgical Company (NASDAQ:STAA) investors will be delighted, with the company turning in some strong numbers with its latest results. The company beat forecasts, with revenue of US$99m, some 3.6% above estimates, and statutory earnings per share (EPS) coming in at US$0.15, 56% ahead of expectations. 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.

See our latest analysis for STAAR Surgical

Following the latest results, STAAR Surgical's 14 analysts are now forecasting revenues of US$343.9m in 2024. This would be a reasonable 3.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to dive 99% to US$0.0033 in the same period. Before this latest report, the consensus had been expecting revenues of US$340.0m and US$0.0017 per share in losses. While there's been no material change to the revenue estimates, there's been a pretty clear upgrade to earnings estimates, with the analysts expecting a per-share profit compared to previous expectations of a loss. So it seems like the latest results have led to a significant increase in sentiment for STAAR Surgical.

The consensus price target was unchanged at US$51.04, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. Currently, the most bullish analyst values STAAR Surgical at US$60.00 per share, while the most bearish prices it at US$37.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the STAAR Surgical's past performance and to peers in the same industry. We would highlight that STAAR Surgical's revenue growth is expected to slow, with the forecast 6.7% annualised growth rate until the end of 2024 being well below the historical 20% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 8.2% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than STAAR Surgical.

The Bottom Line

The most important thing to take away is that there's been a clear step-change in belief around the business' prospects, with the analysts now expecting STAAR Surgical to become profitable next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for STAAR Surgical going out to 2026, 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 1 warning sign with STAAR Surgical , and understanding this 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.