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

MeridianLink, Inc. (NYSE:MLNK) just released its latest first-quarter results and things are looking bullish. The company beat both earnings and revenue forecasts, with revenue of US$73m, some 5.8% above estimates, and statutory earnings per share (EPS) coming in at US$0.09, 125% ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for MeridianLink

After the latest results, the eight analysts covering MeridianLink are now predicting revenues of US$291.0m in 2022. If met, this would reflect a reasonable 6.8% improvement in sales compared to the last 12 months. Earnings are expected to improve, with MeridianLink forecast to report a statutory profit of US$0.21 per share. Before this earnings report, the analysts had been forecasting revenues of US$289.9m and earnings per share (EPS) of US$0.20 in 2022. So the consensus seems to have become somewhat more optimistic on MeridianLink's earnings potential following these results.

The average the analysts price target fell 5.6% to US$23.00, suggesting thatthe analysts have other concerns, and the improved earnings per share outlook was not enough to allay them. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values MeridianLink at US$34.00 per share, while the most bearish prices it at US$17.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that MeridianLink's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 9.1% growth on an annualised basis. This is compared to a historical growth rate of 22% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 14% per year. Factoring in the forecast slowdown in growth, it seems obvious that MeridianLink is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around MeridianLink's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that MeridianLink's revenues are expected to perform worse 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 MeridianLink's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple MeridianLink analysts - going out to 2024, and you can see them free on our platform here.

You can also see whether MeridianLink is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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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.