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As you might know, Accolade, Inc. (NASDAQ:ACCD) recently reported its quarterly numbers. Revenues of US$60m beat expectations by a respectable 6.7%, although statutory losses per share increased. Accolade lost US$0.84, which was 128% more than what the analysts had included in their models. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the most recent consensus for Accolade from ten analysts is for revenues of US$303.6m in 2022 which, if met, would be a substantial 57% increase on its sales over the past 12 months. Losses are expected to hold steady at around US$2.05. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$299.9m and losses of US$1.15 per share in 2022. So it's pretty clear the analysts have mixed opinions on Accolade even after this update; although they reconfirmed their revenue numbers, it came at the cost of a very substantial increase in per-share losses.
Although the analysts are now forecasting higher losses, the average price target rose 8.8% to 58.4, which could indicate that these losses are expected to be "one-off", or are not anticipated to have a longer-term impact on the business. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Accolade analyst has a price target of US$70.00 per share, while the most pessimistic values it at US$58.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Accolade's growth to accelerate, with the forecast 82% annualised growth to the end of 2022 ranking favourably alongside historical growth of 39% per annum over the past year. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.5% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Accolade to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
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. We have estimates - from multiple Accolade analysts - going out to 2024, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 3 warning signs for Accolade 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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