Applied DNA Sciences, Inc. (NASDAQ:APDN) missed earnings with its latest yearly results, disappointing overly-optimistic analysts. The numbers were fairly weak, with sales of US$5.4m missing analyst predictions by 7.6%, and losses of US$9.69 per share being slightly larger than what analysts had expected. Earnings are an important time for investors, as they can track a company’s performance, look at what top 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 forecasts to see whether analysts have changed their earnings models, following these results.
View our latest analysis for Applied DNA Sciences
Taking into account the latest results, the most recent consensus for Applied DNA Sciences from one analyst is for revenues of US$11.5m in 2020, which is a sizeable 113% increase on its sales over the past 12 months. Losses are forecast to balloon 79% to US$2.03 per share. Before this latest report, the consensus had been expecting revenues of US$11.5m and US$1.40 per share in losses. Analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.
With the increase in forecast losses for next year, it’s perhaps no surprise to see that the average analyst price target dipped 96% to US$8.00, with analysts signalling that growing losses would be a definite concern.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the Applied DNA Sciences’s past performance and to peers in the same market. For example, we noticed that Applied DNA Sciences’s rate of growth is expected to accelerate meaningfully, with revenues forecast to grow at 113%, well above its historical decline of 4.9% a year over the past five years. Compare this against analyst estimates for the wider market, which suggest that (in aggregate) market revenues are expected to grow 5.1% next year. So it looks like Applied DNA Sciences is expected to grow faster than its competitors, at least for a while. 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 Applied DNA Sciences’s revenues are expected to grow faster than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by the latest results, leading to a lower estimate of Applied DNA Sciences’s future valuation.
With that in mind, we wouldn’t be too quick to come to a conclusion on Applied DNA Sciences. Long-term earnings power is much more important than next year’s profits. At least one analyst has provided forecasts out to 2021, which can be seen for freeon our platform here.
You can also view our analysis of Applied DNA Sciences’s balance sheet, and whether we think Applied DNA Sciences is carrying too much debt, for freeon our platform here.
If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. 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.
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