ImpediMed Limited (ASX:IPD) Just Reported, And Analysts Assigned A AU$0.021 Price Target
ImpediMed Limited (ASX:IPD) last week reported its latest full-year results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It was a pretty bad result overall; while revenues were in line with expectations at AU$15m, statutory losses exploded to AU$0.01 per share. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the consensus forecast from ImpediMed's three analysts is for revenues of AU$19.6m in 2027. This reflects a sizeable 34% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 54% to AU$0.0031. Before this latest report, the consensus had been expecting revenues of AU$19.6m and AU$0.0066 per share in losses. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a very favorable reduction to losses per share in particular.
View our latest analysis for ImpediMed
The consensus price target fell 25% to AU$0.021despite the forecast for smaller losses next year. It looks like the ongoing lack of profitability is starting to weigh on valuations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values ImpediMed at AU$0.04 per share, while the most bearish prices it at AU$0.0097. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
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. The analysts are definitely expecting ImpediMed's growth to accelerate, with the forecast 34% annualised growth to the end of 2027 ranking favourably alongside historical growth of 8.4% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 10% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that ImpediMed is expected to grow much faster than its 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 reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
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. At Simply Wall St, we have a full range of analyst estimates for ImpediMed going out to 2029, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 5 warning signs for ImpediMed (2 make us uncomfortable!) that you should be aware of.
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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.