Party Time: Brokers Just Made Major Increases To Their Organogenesis Holdings Inc. (NASDAQ:ORGO) Earnings Forecasts

Organogenesis Holdings Inc. (NASDAQ:ORGO) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.

After this upgrade, Organogenesis Holdings' four analysts are now forecasting revenues of US$446m in 2021. This would be a meaningful 18% improvement in sales compared to the last 12 months. Statutory earnings per share are supposed to decline 19% to US$0.31 in the same period. Previously, the analysts had been modelling revenues of US$397m and earnings per share (EPS) of US$0.11 in 2021. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

See our latest analysis for Organogenesis Holdings

With these upgrades, we're not surprised to see that the analysts have lifted their price target 5.2% to US$25.50 per share. 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 Organogenesis Holdings analyst has a price target of US$28.00 per share, while the most pessimistic values it at US$24.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Organogenesis Holdings is an easy business to forecast or the underlying assumptions are obvious.

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. The period to the end of 2021 brings more of the same, according to the analysts, with revenue forecast to display 24% growth on an annualised basis. That is in line with its 24% annual growth over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 14% per year. So although Organogenesis Holdings is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Organogenesis Holdings could be worth investigating further.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 5 potential risks with Organogenesis Holdings, including concerns around earnings quality. For more information, you can click through to our platform to learn more about this and the 4 other risks we've identified .

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.
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