Shareholders will be ecstatic, with their stake up 24% over the past week following Surmodics, Inc.'s (NASDAQ:SRDX) latest quarterly results. It was a solid earnings report, with revenues and earnings both coming in very strong. Revenues were 11% higher than the analysts had forecast, at US$32m, while the company also delivered a surprise statutory profit, against analyst expectations of a loss. 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. 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 Surmodics

Following the recent earnings report, the consensus from four analysts covering Surmodics is for revenues of US$122.9m in 2024. This implies a not inconsiderable 14% decline in revenue compared to the last 12 months. The company is forecast to report a statutory loss of US$0.87 in 2024, a sharp decline from a profit over the last year. Before this earnings announcement, the analysts had been modelling revenues of US$119.6m and losses of US$1.18 per share in 2024. So it seems there's been a definite increase in optimism about Surmodics' future following the latest consensus numbers, with a very favorable reduction to the loss per share forecasts in particular.

There was no major change to the consensus price target of US$58.25, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Surmodics, with the most bullish analyst valuing it at US$75.00 and the most bearish at US$43.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 26% by the end of 2024. This indicates a significant reduction from annual growth of 7.0% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 8.1% per year. It's pretty clear that Surmodics' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. The consensus price target held steady at US$58.25, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Surmodics. Long-term earnings power is much more important than next year's profits. We have forecasts for Surmodics going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Surmodics .

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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.