This Just In: Analysts Are Boosting Their Organogenesis Holdings Inc. (NASDAQ:ORGO) Outlook for This Year

Celebrations may be in order for Organogenesis Holdings Inc. (NASDAQ:ORGO) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. The market seems to be pricing in some improvement in the business too, with the stock up 5.4% over the past week, closing at US$18.67. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

After this upgrade, Organogenesis Holdings' four analysts are now forecasting revenues of US$397m in 2021. This would be a meaningful 17% improvement in sales compared to the last 12 months. Statutory earnings per share are anticipated to plunge 36% to US$0.11 in the same period. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$343m and losses of US$0.075 per share in 2021. So we can see that this has sparked a pretty clear upgrade to expectations, with higher revenues anticipated to lead to profit sooner than previously forecast.

View our latest analysis for Organogenesis Holdings

It will come as no surprise to learn that the analysts have increased their price target for Organogenesis Holdings 45% to US$21.00 on the back of these upgrades. 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. Currently, the most bullish analyst values Organogenesis Holdings at US$22.00 per share, while the most bearish prices it at US$20.00. Still, with such a tight range of estimates, it suggests the 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. The period to the end of 2021 brings more of the same, according to the analysts, with revenue forecast to display 17% growth on an annualised basis. That is in line with its 19% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 18% annually. It's clear that while Organogenesis Holdings' revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The most important thing to take away from this upgrade is that there is now an expectation for Organogenesis Holdings to become profitable this year, compared to previous expectations of a loss. They also upgraded their revenue forecasts, although the latest estimates suggest that Organogenesis Holdings will grow in line with the overall market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Organogenesis Holdings.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 5 potential flags with Organogenesis Holdings, including dilutive stock issuance over the past year. You can learn more, and discover the 3 other flags we've identified, for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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