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It's been a sad week for Bridgeline Digital, Inc. (NASDAQ:BLIN), who've watched their investment drop 20% to US$4.07 in the week since the company reported its quarterly result. Revenues of US$3.4m beat expectations by a respectable 6.0%, although statutory losses per share increased. Bridgeline Digital lost US$0.61, which was 1,120% more than what the analyst had included in their models. This is an important time for investors, as they can track a company's performance in its report, look at what expert is forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analyst has changed their mind on Bridgeline Digital after the latest results.
Taking into account the latest results, the consensus forecast from Bridgeline Digital's single analyst is for revenues of US$17.8m in 2022, which would reflect a sizeable 50% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 95% to US$0.04. Yet prior to the latest earnings, the analyst had been forecasting revenues of US$16.3m and losses of US$0.12 per share in 2022. So it seems there's been a definite increase in optimism about Bridgeline Digital's future following the latest consensus numbers, with a considerable decrease in the loss per share forecasts in particular.
The consensus price target rose 24% to US$6.50, with the analyst encouraged by the higher revenue and lower forecast losses for next year.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that Bridgeline Digital is forecast to grow faster in the future than it has in the past, with revenues expected to display 38% annualised growth until the end of 2022. If achieved, this would be a much better result than the 11% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 14% annually. Not only are Bridgeline Digital's revenues expected to improve, it seems that the analyst is also expecting it to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analyst reconfirmed their loss per share estimates for next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster 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 in mind, we wouldn't be too quick to come to a conclusion on Bridgeline Digital. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2022, which can be seen for free on our platform here.
You should always think about risks though. Case in point, we've spotted 4 warning signs for Bridgeline Digital you should be aware of.
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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