Yahoo Finance Earnings Update: BIOLASE, Inc. (NASDAQ:BIOL) Just Reported And Analysts Are Trimming Their Forecasts
BIOLASE, Inc. (NASDAQ:BIOL) missed earnings with its latest full-year results, disappointing overly-optimistic forecasters. Revenues missed expectations somewhat, coming in at US$38m and leading to a corresponding blowout in statutory losses. The loss per share was US$0.77, some 12% larger than the analysts forecast. 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.
See our latest analysis for BIOLASE
After the latest results, the consensus from BIOLASE's dual analysts is for revenues of US$29.0m in 2020, which would reflect a painful 23% decline in sales compared to the last year of performance. The loss per share is expected to greatly reduce in the near future, narrowing 38% to US$0.47. Before this earnings announcement, the analysts had been modelling revenues of US$44.8m and losses of US$0.31 per share in 2020. 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.
There was no major change to the consensus price target of US$2.50, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One more thing stood out to us about these estimates, and it's the idea that BIOLASE's decline is expected to accelerate, with revenues forecast to fall 23% next year, topping off a historical decline of 3.0% a year over the past five years. Compare this against analyst estimates for companies in the wider industry, which suggest that revenues (in aggregate) are expected to grow 7.6% next year. So it's pretty clear that, while it does have declining revenues, the analysts also expect BIOLASE to suffer worse 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 BIOLASE. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at US$2.50, with the latest estimates not enough to have an impact on their price targets.
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. At least one analyst has provided forecasts out to 2021, which can be seen for free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 5 warning signs with BIOLASE (at least 1 which doesn't sit too well with us) , and understanding them should be part of your investment process.
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