ShotSpotter, Inc. Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

Shareholders of ShotSpotter, Inc. (NASDAQ:SSTI) will be pleased this week, given that the stock price is up 11% to US$37.00 following its latest second-quarter results. It looks like a credible result overall - although revenues of US$20m were what the analysts expected, ShotSpotter surprised by delivering a statutory profit of US$0.24 per share, instead of the previously forecast loss. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for ShotSpotter

After the latest results, the seven analysts covering ShotSpotter are now predicting revenues of US$82.1m in 2022. If met, this would reflect a solid 18% improvement in sales compared to the last 12 months. Earnings are expected to improve, with ShotSpotter forecast to report a statutory profit of US$0.18 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$82.2m and losses of US$0.042 per share in 2022. While there's been no material change to the revenue estimates, there's been a pretty clear upgrade to earnings estimates, with the analysts expecting a per-share profit compared to previous expectations of a loss. So it seems like the latest results have led to a significant increase in sentiment for ShotSpotter.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 13% to US$48.33. 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. Currently, the most bullish analyst values ShotSpotter at US$55.00 per share, while the most bearish prices it at US$38.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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 analysts are definitely expecting ShotSpotter's growth to accelerate, with the forecast 39% annualised growth to the end of 2022 ranking favourably alongside historical growth of 21% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect ShotSpotter to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts now expect ShotSpotter to become profitable next year, compared to previous expectations that it would report a loss. 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. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on ShotSpotter. 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 ShotSpotter going out to 2023, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 2 warning signs for ShotSpotter you should be aware of.

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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.