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Earnings Update: Here's Why Analysts Just Lifted Their Qumu Corporation (NASDAQ:QUMU) Price Target To US$3.50

Qumu Corporation (NASDAQ:QUMU) investors will be delighted, with the company turning in some strong numbers with its latest results. Revenues and losses per share were both better than expected, with revenues of US$5.1m leading estimates by 5.0%. Statutory losses were smaller than the analystexpected, coming in at US$0.15 per share. Following the result, the analyst has 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 estimate suggests is in store for next year.

See our latest analysis for Qumu

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Taking into account the latest results, the current consensus, from the solitary analyst covering Qumu, is for revenues of US$20.5m in 2022, which would reflect a chunky 8.5% reduction in Qumu's sales over the past 12 months. Losses are forecast to narrow 9.9% to US$0.75 per share. Yet prior to the latest earnings, the analyst had been forecasting revenues of US$20.9m and losses of US$0.87 per share in 2022. Although the revenue estimate has not really changed Qumu'sfuture looks a little different to the past, with a cut to the loss per share forecasts in particular.

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These new estimates led to the consensus price target rising 40% to US$3.50, with lower forecast losses suggesting things could be looking up for Qumu.

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. One more thing stood out to us about these estimates, and it's the idea that Qumu's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 16% to the end of 2022. This tops off a historical decline of 3.0% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 13% per year. So while a broad number of companies are forecast to grow, unfortunately Qumu is expected to see its sales affected worse than other companies in the industry.

The Bottom Line

The most important thing to take away is that the analyst reconfirmed their loss per share estimates for next year. Fortunately, the analyst also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Qumu's revenues are expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analyst 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 Qumu going out as far as 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 3 warning signs for Qumu (1 is potentially serious) you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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