Champions Oncology, Inc. (NASDAQ:CSBR) Analysts Are Pretty Bullish On The Stock After Recent Results

Last week, you might have seen that Champions Oncology, Inc. (NASDAQ:CSBR) released its second-quarter result to the market. The early response was not positive, with shares down 4.7% to US$11.40 in the past week. Revenues beat expectations, coming in 7.8% ahead of forecasts, and the company broke even on a statutory earnings per share (EPS) level. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Champions Oncology

Taking into account the latest results, the current consensus from Champions Oncology's three analysts is for revenues of US$38.6m in 2021, which would reflect a satisfactory 3.1% increase on its sales over the past 12 months. Champions Oncology is also expected to turn profitable, with statutory earnings of US$0.06 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$38.6m and earnings per share (EPS) of US$0.06 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The consensus price target rose 17% to US$12.83despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Champions Oncology's earnings by assigning a price premium. 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. There are some variant perceptions on Champions Oncology, with the most bullish analyst valuing it at US$12.00 and the most bearish at US$10.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company 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 Champions Oncology's revenue growth will slow down substantially, with revenues next year expected to grow 3.1%, compared to a historical growth rate of 25% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.7% next year. Factoring in the forecast slowdown in growth, it seems obvious that Champions Oncology is also expected to grow slower than other industry participants.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse 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 Champions Oncology. Long-term earnings power is much more important than next year's profits. We have forecasts for Champions Oncology going out to 2025, 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 Champions Oncology that we have uncovered.

If you decide to trade Champions Oncology, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

This article by Simply Wall St is general in nature. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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