Yahoo Finance LightPath Technologies, Inc. Just Beat Revenue By 11%: Here's What Analysts Think Will Happen Next
The investors in LightPath Technologies, Inc.'s (NASDAQ:LPTH) will be rubbing their hands together with glee today, after the share price leapt 69% to US$1.18 in the week following its quarterly results. It was a mildly positive result, with revenues exceeding expectations at US$9.6m, while statutory earnings per share (EPS) of US$0.03 were in line with analyst forecasts. 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. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.
See our latest analysis for LightPath Technologies
Taking into account the latest results, the current consensus from LightPath Technologies's lone analyst is for revenues of US$35.1m in 2020, which would reflect a reasonable 3.9% increase on its sales over the past 12 months. Before this latest report, the consensus had been expecting revenues of US$34.1m and US$0.03 per share in losses. So it seems there's been a definite increase in optimism about LightPath Technologies's future following the latest results, with a the earnings per share forecasts in particular.
The average analyst price target fell 63% to US$0.75, with analysts clearly having become less optimistic about LightPath Technologies's prospects following its latest earnings.
It can also be useful to step back and take a broader view of how analyst forecasts compare to LightPath Technologies's performance in recent years. We would highlight that LightPath Technologies's revenue growth is expected to slow, with forecast 3.9% increase next year well below the historical 21%p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the market, which are in aggregate expected to see revenue growth of 5.3% next year. So it's pretty clear that, while revenue growth is expected to slow down, analysts still expect the wider market to grow faster than LightPath Technologies.
The Bottom Line
The most important thing to take away from these updates is that analysts now expect LightPath Technologies to become profitable next year, compared to previous expectations that it would report a loss. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider market. Analysts also downgraded their price target, suggesting that the latest news has led analysts to become more pessimistic about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on LightPath Technologies. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2021, which can be seen for free on our platform here.
It might also be worth considering whether LightPath Technologies's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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