LiqTech International, Inc. (NASDAQ:LIQT) just released its third-quarter report and things are looking bullish. Results clearly exceeded expectations, with a substantial revenue beat leading to smaller losses in what looks like a definite win for investors. Revenues were US$5.1m and the statutory loss per share was US$0.25, smaller than the analyst had forecast. Following the result, the analyst has updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimate suggests is in store for next year.
View our latest analysis for LiqTech International
Taking into account the latest results, the most recent consensus for LiqTech International from solitary analyst is for revenues of US$29.7m in 2024. If met, it would imply a sizeable 64% increase on its revenue over the past 12 months. Statutory losses are forecast to balloon 76% to US$0.31 per share. Before this earnings report, the analyst had been forecasting revenues of US$34.0m and break-even in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a real cut to revenue estimates and a earnings per share numbers as well.
The average price target fell 19% to US$13.00, implicitly signalling that lower earnings per share are a leading indicator for LiqTech International's valuation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the LiqTech International's past performance and to peers in the same industry. One thing stands out from these estimates, which is that LiqTech International is forecast to grow faster in the future than it has in the past, with revenues expected to display 49% annualised growth until the end of 2024. If achieved, this would be a much better result than the 5.8% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 3.7% per year. Not only are LiqTech International's revenues expected to improve, it seems that the analyst is also expecting it to grow faster than the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at LiqTech International. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Furthermore, the analyst 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 least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.
It is also worth noting that we have found 2 warning signs for LiqTech International 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.