Minerva Surgical, Inc. (NASDAQ:UTRS) Just Reported Earnings, And Analysts Cut Their Target Price

Investors in Minerva Surgical, Inc. (NASDAQ:UTRS) had a good week, as its shares rose 2.8% to close at US$5.12 following the release of its yearly results. The statutory results were not great - while revenues of US$52m were in line with expectations,Minerva Surgical lost US$3.06 a share in the process. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Minerva Surgical after the latest results.

See our latest analysis for Minerva Surgical

Taking into account the latest results, the current consensus from Minerva Surgical's three analysts is for revenues of US$61.2m in 2022, which would reflect a decent 17% increase on its sales over the past 12 months. Losses are forecast to balloon 35% to US$1.01 per share. Before this latest report, the consensus had been expecting revenues of US$61.2m and US$1.01 per share in losses.

As a result, it's unexpected to see that the consensus price target fell 17% to US$12.67, with the analysts seemingly becoming more concerned about ongoing losses, despite making no major changes to their forecasts. 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 Minerva Surgical at US$17.00 per share, while the most bearish prices it at US$14.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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. It's pretty clear that there is an expectation that Minerva Surgical's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 17% growth on an annualised basis. This is compared to a historical growth rate of 38% over the past year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.9% per year. So it's pretty clear that, while Minerva Surgical's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. 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 Minerva Surgical analysts - going out to 2023, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Minerva Surgical (1 is a bit concerning!) that you need to take into consideration.

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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.