US$25.00: That's What Analysts Think Paragon 28, Inc. (NYSE:FNA) Is Worth After Its Latest Results

Shareholders in Paragon 28, Inc. (NYSE:FNA) had a terrible week, as shares crashed 31% to US$12.76 in the week since its latest first-quarter results. Paragon 28 beat revenue forecasts by a solid 10%, hitting US$41m. Statutory losses also blew out, with the loss per share reaching US$0.12, some 71% bigger than the analysts expected. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Paragon 28

Taking into account the latest results, the current consensus from Paragon 28's five analysts is for revenues of US$171.6m in 2022, which would reflect a notable 10% increase on its sales over the past 12 months. Losses are supposed to decline, shrinking 13% from last year to US$0.25. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$168.5m and losses of US$0.20 per share in 2022. So it's pretty clear the analysts have mixed opinions on Paragon 28 even after this update; although they reconfirmed their revenue numbers, it came at the cost of a massive increase in per-share losses.

With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 6.0% to US$25.00, with the analysts signalling that growing losses would be a definite concern. 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. Currently, the most bullish analyst values Paragon 28 at US$30.00 per share, while the most bearish prices it at US$20.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Paragon 28's revenue growth is expected to slow, with the forecast 14% annualised growth rate until the end of 2022 being well below the historical 28% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.7% per year. Even after the forecast slowdown in growth, it seems obvious that Paragon 28 is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Paragon 28's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Paragon 28. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Paragon 28 going out to 2024, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for Paragon 28 that we have uncovered.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.