Applied DNA Sciences, Inc. (NASDAQ:APDN) defied analyst predictions to release its quarterly results, which were ahead of market expectations. The results were impressive, with revenues of US$6.1m exceeding analyst forecasts by 37%, and statutory losses of US$0.23 were likewise much smaller than the analysts had forecast. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Applied DNA Sciences

Taking into account the latest results, the most recent consensus for Applied DNA Sciences from three analysts is for revenues of US$21.1m in 2022 which, if met, would be a substantial 40% increase on its sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 28% to US$1.28. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$15.4m and losses of US$1.44 per share in 2022. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to this year's revenue estimates, while at the same time reducing their loss estimates.

The consensus price target fell 28%, to US$12.00, suggesting that the analysts remain pessimistic on the company, despite the improved earnings and revenue outlook. 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 Applied DNA Sciences analyst has a price target of US$24.00 per share, while the most pessimistic values it at US$6.00. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

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. The analysts are definitely expecting Applied DNA Sciences' growth to accelerate, with the forecast 96% annualised growth to the end of 2022 ranking favourably alongside historical growth of 19% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 8.0% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Applied DNA Sciences is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues 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. We have forecasts for Applied DNA Sciences 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 Applied DNA Sciences (1 is 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.