Yahoo Finance Earnings Beat: Sol-Gel Technologies Ltd. (NASDAQ:SLGL) Just Beat Analyst Forecasts, And Analysts Have Been Lifting Their Forecasts
Investors in Sol-Gel Technologies Ltd. (NASDAQ:SLGL) had a good week, as its shares rose 8.3% to close at US$7.56 following the release of its yearly results. Sales hit US$23m in line with forecasts, although the company reported a statutory loss per share of US$1.26 that was somewhat smaller than the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
View our latest analysis for Sol-Gel Technologies
After the latest results, the consensus from Sol-Gel Technologies's four analysts is for revenues of US$18.5m in 2020, which would reflect a chunky 19% decline in sales compared to the last year of performance. Losses are expected to hold steady at around US$1.28. Before this earnings announcement, the analysts had been modelling revenues of US$17.0m and losses of US$1.29 per share in 2020.
The consensus price target held steady at US$25.40 despite the upgrade to revenue forecasts and ongoing losses. The analysts seems to think the business is otherwise performing roughly in line with expectations. 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. Currently, the most bullish analyst values Sol-Gel Technologies at US$33.00 per share, while the most bearish prices it at US$21.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
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. We would highlight that sales are expected to reverse, with the forecast 19% revenue decline a notable change from historical growth of 372% over the last year. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.1% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Sol-Gel Technologies is expected to lag the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. The consensus price target held steady at US$25.40, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Sol-Gel Technologies analysts - going out to 2024, and you can see them free on our platform here.
You still need to take note of risks, for example - Sol-Gel Technologies has 3 warning signs we think you should be aware of.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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