Tufin Software Technologies Ltd. (NYSE:TUFN) shares fell 4.1% to US$14.58 in the week since its latest annual results. Revenues of US$103m were in line with expectations, although statutory losses per share were US$1.04, some 13% smaller than was expected. This is an important time for investors, as they can track a company’s performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the latest consensus from Tufin Software Technologies’s seven analysts is for revenues of US$120.0m in 2020, which would reflect a meaningful 16% improvement in sales compared to the last 12 months. Losses are expected to be contained, narrowing 20% from last year to US$1.24, on a statutory basis. Before this earnings announcement, analysts had been forecasting revenues of US$121.4m and losses of US$0.96 per share in 2020. Analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.
As a result, there was no major change to the consensus price target of US$17.79, with analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. 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 Tufin Software Technologies analyst has a price target of US$22.00 per share, while the most pessimistic values it at US$15.00. This shows there is still quite a bit of diversity in estimates, but analysts don’t appear to be totally split on the stock as though it might be a success or failure situation.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the Tufin Software Technologies’s past performance and to peers in the same market. It’s pretty clear that analysts expect Tufin Software Technologies’s revenue growth will slow down substantially, with revenues next year expected to grow 16%, compared to a historical growth rate of 22% over the past year. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 12% next year. Even after the forecast slowdown in growth, it seems obvious that analysts still thinkTufin Software Technologies will grow faster than the wider market.
The Bottom Line
The most obvious conclusion is that analysts made no changes to their forecasts for a loss next year. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations – and our data does suggest that Tufin Software Technologies’s revenues are expected to grow faster than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Still, the long-term prospects of the business are much more relevant than next year’s earnings. We have estimates – from multiple Tufin Software Technologies analysts – going out to 2022, and you can see them free on our platform here.
We also provide an overview of the Tufin Software Technologies Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.