Treace Medical Concepts, Inc. (NASDAQ:TMCI) just released its latest third-quarter results and things are looking bullish. It looks like a positive result overall, with revenues of US$45m beating forecasts by 3.7%. Statutory losses of US$0.25 per share were 3.7% smaller than the analysts expected, likely helped along by the higher revenues. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the six analysts covering Treace Medical Concepts are now predicting revenues of US$225.0m in 2025. If met, this would reflect a solid 11% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 24% to US$0.75. Before this earnings announcement, the analysts had been modelling revenues of US$226.0m and losses of US$0.77 per share in 2025. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers were unchanged.
The average price target rose 5.6% to US$7.50, with the analysts signalling that the forecast reduction in losses would be a positive for the stock's valuation. 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 Treace Medical Concepts at US$8.00 per share, while the most bearish prices it at US$7.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
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. It's pretty clear that there is an expectation that Treace Medical Concepts' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 8.6% growth on an annualised basis. This is compared to a historical growth rate of 31% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.3% annually. Factoring in the forecast slowdown in growth, it looks like Treace Medical Concepts is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Treace Medical Concepts going out to 2026, and you can see them free on our platform here.
Before you take the next step you should know about the 2 warning signs for Treace Medical Concepts that we have uncovered.
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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.
