Wright Medical Group S.A. (NASDAQ:WMGI) just released its latest quarterly results and things are looking optimistic. Revenue and loss per share were both better than expected, with revenue of US$223 million topping estimates of 9.7%. Statutory losses were lower than analysts’ expectations at $0.13 per share. Analysts typically update their forecasts with each earnings report, and we can judge from their estimates if their view of the business has changed or if there are new concerns to consider. We thought readers would find it interesting to see analysts’ latest post-earnings (statutory) forecasts for next year.
Given the latest results, the current consensus of Wright Medical Group’s six analysts is for revenue of $1.05 billion in 2021, which would reflect a significant 29% increase in sales over the past 12 month. Earnings are expected to improve, with Wright Medical Group expecting to report statutory earnings of $0.20 per share. Yet before the latest results, analysts had forecast revenue of $1.05 billion and earnings per share (EPS) of $0.20 in 2021. Consensus analysts don’t appear to have seen anything in these results that would have changed their point of view. on the company, given that there has been no major change in their estimates.
There was no change in revenue or earnings estimates or the price target of US$30.67, suggesting the company met expectations in its recent results. The consensus price target is only an average of individual analyst targets, so it might be useful to see how wide the range of the underlying estimates is. There are some different perceptions on Wright Medical Group, with the most bullish analyst pricing it at US$31.00 and the most bearish at US$30.00 per share. The low dispersion of estimates could suggest that the company’s future is relatively easy to gauge, or that analysts have a strong opinion on its prospects.
One way to get more context on these forecasts is to examine how they compare both to past performance and to the performance of other companies in the same industry. It is clear from the latest estimates that Wright Medical Group’s growth rate is set to accelerate significantly, with projected revenue growth of 29% significantly faster than its historical growth of 13% per year over the past five years. . In contrast, our data suggests that other companies (with analyst coverage) in a similar industry are expected to grow revenue by 10% annually. It seems obvious that while growth prospects are brighter than in the recent past, analysts also expect Wright Medical Group to grow faster than the industry as a whole.
The most obvious conclusion is that there has been no major shift in the company’s outlook lately, with analysts holding their earnings forecast flat, in line with previous estimates. Fortunately, there have been no major changes to the revenue forecast, with the business still expected to grow faster than the industry as a whole. The consensus price target held steady at US$30.67 as the latest estimates were not enough to impact their price targets.
With that in mind, we still believe the longer-term trajectory of the company is much more important for investors to consider. We have predictions for Wright Medical Group through 2023, and you can view them for free on our platform here.
Remember that there may still be risks. For example, we have identified 1 warning sign for Wright Medical Group of which you should be aware.
This Simply Wall St article is general in nature. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
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