It's shaping up to be a tough period for IsoRay, Inc. (NYSEMKT:ISR), which a week ago released some disappointing annual results that could have a notable impact on how the market views the stock. Revenues missed expectations somewhat, coming in at US$9.7m and leading to a corresponding blowout in statutory losses. The loss per share was US$0.05, some 11% larger than the analysts forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the consensus forecast from IsoRay's twin analysts is for revenues of US$11.0m in 2021, which would reflect a meaningful 14% improvement in sales compared to the last 12 months. Per-share losses are predicted to creep up to US$0.055. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$14.0m and losses of US$0.04 per share in 2021. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.
The analysts lifted their price target 13% to US$1.50, implicitly signalling that lower earnings per share are not expected to have a longer-term impact on the stock's value.
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. Next year brings more of the same, according to the analysts, with revenue forecast to grow 14%, in line with its 16% annual growth over the past five years. Compare this with the wider industry (in aggregate), which analyst estimates suggest will see revenues grow 20% next year. So although IsoRay is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at IsoRay. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for IsoRay going out as far as 2025, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 4 warning signs for IsoRay (1 can't be ignored!) 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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