Earnings Update: Here's Why Analysts Just Lifted Their Zynex, Inc. (NASDAQ:ZYXI) Price Target To US$19.88

Investors in Zynex, Inc. (NASDAQ:ZYXI) had a good week, as its shares rose 5.5% to close at US$11.54 following the release of its first-quarter results. It was a curious result overall, with revenues coming in 2.4% below what the analysts had expected, at US$47m. The company broke even in terms of statutory earnings per share (EPS). 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Zynex after the latest results.

See our latest analysis for Zynex

Taking into account the latest results, the current consensus from Zynex's four analysts is for revenues of US$227.0m in 2024. This would reflect a substantial 20% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 92% to US$0.49. Before this earnings report, the analysts had been forecasting revenues of US$227.4m and earnings per share (EPS) of US$0.48 in 2024. So the consensus seems to have become somewhat more optimistic on Zynex'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 8.1% to US$19.88. 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. 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.

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 Zynex'shistorical trends, as the 28% annualised revenue growth to the end of 2024 is roughly in line with the 32% 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 although Zynex is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Zynex following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider 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.

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 forecasts for Zynex going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Zynex you should know about.

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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.