Tactile Systems Technology, Inc. Just Recorded A 18% EPS Beat: Here's What Analysts Are Forecasting Next

Tactile Systems Technology, Inc. (NASDAQ:TCMD) came out with its third-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues US$73m disappointed slightly, at3.8% below what the analysts had predicted. Profits were a relative bright spot, with statutory per-share earnings of US$0.21 coming in 18% above what was anticipated. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Tactile Systems Technology

Taking into account the latest results, the most recent consensus for Tactile Systems Technology from five analysts is for revenues of US$322.2m in 2025. If met, it would imply a decent 13% increase on its revenue over the past 12 months. Per-share earnings are expected to bounce 34% to US$0.86. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$327.1m and earnings per share (EPS) of US$0.83 in 2025. So the consensus seems to have become somewhat more optimistic on Tactile Systems Technology's earnings potential following these results.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 16% to US$24.00. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Tactile Systems Technology, with the most bullish analyst valuing it at US$25.00 and the most bearish at US$23.00 per share. This is a very narrow spread of estimates, implying either that Tactile Systems Technology is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Tactile Systems Technology's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Tactile Systems Technology'shistorical trends, as the 10% annualised revenue growth to the end of 2025 is roughly in line with the 10% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 8.2% annually. It's clear that while Tactile Systems Technology's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Tactile Systems Technology's earnings potential next year. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Tactile Systems Technology going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Tactile Systems Technology that 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.