Wright Medical Group N.V. (NASDAQ:WMGI) just released its latest quarterly results and things are looking bullish. Revenues and losses per share were both better than expected, with revenues of US$223m leading estimates by 9.7%. Statutory losses were smaller than the analystsexpected, coming in at US$0.13 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus from Wright Medical Group's six analysts is for revenues of US$1.05b in 2021, which would reflect a major 29% increase on its sales over the past 12 months. Earnings are expected to improve, with Wright Medical Group forecast to report a statutory profit of US$0.20 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.05b and earnings per share (EPS) of US$0.20 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of US$30.67, suggesting that the company has met expectations in its recent result. 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. There are some variant perceptions on Wright Medical Group, with the most bullish analyst valuing it at US$31.00 and the most bearish at US$30.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
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 clear from the latest estimates that Wright Medical Group's rate of growth is expected to accelerate meaningfully, with the forecast 29% revenue growth noticeably faster than its historical growth of 13%p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 10% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Wright Medical Group to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. 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$30.67, 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 Wright Medical Group going out to 2023, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Wright Medical Group that 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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