Tactile Systems Technology, Inc. (NASDAQ:TCMD) shareholders are probably feeling a little disappointed, since its shares fell 5.3% to US$36.29 in the week after its latest quarterly results. Tactile Systems Technology beat expectations by 5.4% with revenues of US$49m. It also surprised on the earnings front, with an unexpected statutory profit of US$0.12 per share a nice improvement on the losses that the analysts forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
See our latest analysis for Tactile Systems Technology
Following the latest results, Tactile Systems Technology's six analysts are now forecasting revenues of US$230.0m in 2021. This would be a major 24% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Tactile Systems Technology forecast to report a statutory profit of US$0.44 per share. Before this earnings report, the analysts had been forecasting revenues of US$233.7m and earnings per share (EPS) of US$0.45 in 2021. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
The consensus price target held steady at US$63.25, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Tactile Systems Technology at US$70.00 per share, while the most bearish prices it at US$51.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. Next year brings more of the same, according to the analysts, with revenue forecast to grow 24%, in line with its 24% annual growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 10% next year. So although Tactile Systems Technology is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$63.25, with the latest estimates not enough to have an impact on their price targets.
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 Tactile Systems Technology 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 1 warning sign for Tactile Systems Technology you should be aware of.
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. 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.
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