N-able, Inc. (NYSE:NABL) last week reported its latest yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Results were overall in line with expectations, with the company breaking even at the statutory earnings per share (EPS) level on US$346m in revenue. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the most recent consensus for N-able from six analysts is for revenues of US$386.4m in 2022 which, if met, would be a decent 12% increase on its sales over the past 12 months. Statutory earnings per share are predicted to jump 41,830% to US$0.26. In the lead-up to this report, the analysts had been modelling revenues of US$390.3m and earnings per share (EPS) of US$0.24 in 2022. Although the revenue estimates have not really changed, we can see there's been a nice gain to earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.
The average the analysts price target fell 8.7% to US$14.70, suggesting thatthe analysts have other concerns, and the improved earnings per share outlook was not enough to allay them. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values N-able at US$18.00 per share, while the most bearish prices it at US$12.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await N-able shareholders.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the N-able's past performance and to peers in the same industry. The period to the end of 2022 brings more of the same, according to the analysts, with revenue forecast to display 12% growth on an annualised basis. That is in line with its 13% annual growth over the past three years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 14% annually. So it's pretty clear that N-able is expected to grow slower than similar companies in the same industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards N-able following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
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 forecasts for N-able going out to 2024, and you can see them free on our platform here.
Even so, be aware that N-able is showing 2 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...
What are the risks and opportunities for N-able?
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