Investors in VerifyMe, Inc. (NASDAQ:VRME) had a good week, as its shares rose 2.8% to close at US$1.11 following the release of its quarterly results. It was a respectable set of results; while revenues of US$5.6m were in line with analyst predictions, statutory losses were 10% smaller than expected, with VerifyMe losing US$0.09 per share. 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.
See our latest analysis for VerifyMe
After the latest results, the two analysts covering VerifyMe are now predicting revenues of US$28.4m in 2024. If met, this would reflect a credible 7.9% improvement in revenue compared to the last 12 months. Per-share losses are supposed to see a sharp uptick, reaching US$0.39. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$28.8m and losses of US$0.23 per share in 2024. While next 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.
With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 19% to US$2.85, with the analysts signalling that growing losses would be a definite concern.
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 VerifyMe's revenue growth is expected to slow, with the forecast 6.3% annualised growth rate until the end of 2024 being well below the historical 85% p.a. growth over the last five years. Compare this to the 222 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 5.1% per year. So it's pretty clear that, while VerifyMe's revenue growth is expected to slow, it's expected to grow roughly in line with the 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 real changes to revenue forecasts, with the business still expected to grow in line with the overall 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.
With that in mind, we wouldn't be too quick to come to a conclusion on VerifyMe. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.
And what about risks? Every company has them, and we've spotted 3 warning signs for VerifyMe you should know about.
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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.