Yahoo Finance Vonage Holdings Corp. (NASDAQ:VG) Third-Quarter Results: Here's What Analysts Are Forecasting For Next Year
The investors in Vonage Holdings Corp.'s (NASDAQ:VG) will be rubbing their hands together with glee today, after the share price leapt 20% to US$12.71 in the week following its quarterly results. Revenues of US$317m beat expectations by a respectable 2.7%, although statutory losses per share increased. Vonage Holdings lost US$0.04, which was 37% 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
See our latest analysis for Vonage Holdings
Taking into account the latest results, the most recent consensus for Vonage Holdings from 14 analysts is for revenues of US$1.30b in 2021 which, if met, would be a reasonable 4.0% increase on its sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 71% to US$0.029. Before this latest report, the consensus had been expecting revenues of US$1.29b and US$0.07 per share in losses. Although the revenue estimates have not really changed Vonage Holdings'future looks a little different to the past, with a the loss per share forecasts in particular.
There's been no major changes to the consensus price target of US$14.54, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Vonage Holdings analyst has a price target of US$18.00 per share, while the most pessimistic values it at US$12.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Vonage Holdings' past performance and to peers in the same industry. We would highlight that Vonage Holdings' revenue growth is expected to slow, with forecast 4.0% increase next year well below the historical 6.7%p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 1.5% next year. So it's pretty clear that, while Vonage Holdings' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss 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 no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Vonage Holdings going out to 2022, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Vonage Holdings (at least 1 which is a bit concerning) , and understanding them should be part of your investment process.
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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