US$20.67: That's What Analysts Think Tactile Systems Technology, Inc. (NASDAQ:TCMD) Is Worth After Its Latest Results

Last week, you might have seen that Tactile Systems Technology, Inc. (NASDAQ:TCMD) released its quarterly result to the market. The early response was not positive, with shares down 4.1% to US$13.85 in the past week. The results don't look great, especially considering that statutory losses grew 16% toUS$0.09 per share. Revenues of US$61,088,000 did beat expectations by 3.1%, but it looks like a bit of a cold comfort. 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 consensus forecast from Tactile Systems Technology's four analysts is for revenues of US$303.0m in 2024. This reflects a decent 9.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to crater 53% to US$0.55 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$302.9m and earnings per share (EPS) of US$0.57 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target fell 14% to US$20.67, with the analysts clearly linking lower forecast earnings to the performance of the stock price. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Tactile Systems Technology at US$25.00 per share, while the most bearish prices it at US$17.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of Tactile Systems Technology'shistorical trends, as the 13% annualised revenue growth to the end of 2024 is roughly in line with the 11% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 8.1% per year. So it's pretty clear that Tactile Systems Technology is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 estimates - from multiple Tactile Systems Technology analysts - 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 2 warning signs for Tactile Systems Technology 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.