The analysts might have been a bit too bullish on OMNIQ Corp. (NASDAQ:OMQS), given that the company fell short of expectations when it released its second-quarter results last week. Revenues missed expectations somewhat, coming in at US$24m, but statutory earnings fell catastrophically short, with a loss of US$0.44 some 69% larger than what the analysts had predicted. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the current consensus from OMNIQ's three analysts is for revenues of US$104.5m in 2022, which would reflect a meaningful 9.0% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 24% to US$1.36. Before this earnings announcement, the analysts had been modelling revenues of US$105.8m and losses of US$0.98 per share in 2022. While this year's revenue estimates held steady, there was also a massive increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
The consensus price target held steady at US$14.33, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic OMNIQ analyst has a price target of US$17.00 per share, while the most pessimistic values it at US$13.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting OMNIQ is an easy business to forecast or the the analysts are all using similar assumptions.
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. It's clear from the latest estimates that OMNIQ's rate of growth is expected to accelerate meaningfully, with the forecast 19% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 7.7% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect OMNIQ 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 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.
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 forecasts for OMNIQ going out to 2023, and you can see them free on our platform here.
It is also worth noting that we have found 5 warning signs for OMNIQ (2 are a bit concerning!) that you need to take into consideration.
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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.
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