Earnings Miss: Zynex, Inc. Missed EPS By 33% And Analysts Are Revising Their Forecasts

The analysts might have been a bit too bullish on Zynex, Inc. (NASDAQ:ZYXI), given that the company fell short of expectations when it released its full-year results last week. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at US$184m, statutory earnings missed forecasts by an incredible 33%, coming in at just US$0.27 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.

See our latest analysis for Zynex

Taking into account the latest results, the consensus forecast from Zynex's four analysts is for revenues of US$227.4m in 2024. This reflects a sizeable 23% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 60% to US$0.48. Before this earnings report, the analysts had been forecasting revenues of US$232.9m and earnings per share (EPS) of US$0.54 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.

What's most unexpected is that the consensus price target rose 17% to US$18.98, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip. 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. The most optimistic Zynex analyst has a price target of US$27.00 per share, while the most pessimistic values it at US$15.00. 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. It's pretty clear that there is an expectation that Zynex's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 23% growth on an annualised basis. This is compared to a historical growth rate of 34% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.8% per year. So it's pretty clear that, while Zynex's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Zynex. They also downgraded Zynex's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Zynex. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Zynex analysts - going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Zynex .

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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.