Proto Labs, Inc. (NYSE:PRLB) just released its first-quarter report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 2.6% to hit US$128m. Proto Labs also reported a statutory profit of US$0.20, which was an impressive 33% above what 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Proto Labs

Following last week's earnings report, Proto Labs' four analysts are forecasting 2024 revenues to be US$512.1m, approximately in line with the last 12 months. Per-share earnings are expected to rise 7.2% to US$0.84. In the lead-up to this report, the analysts had been modelling revenues of US$516.3m and earnings per share (EPS) of US$0.93 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

The consensus price target held steady at US$39.50, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. Currently, the most bullish analyst values Proto Labs at US$45.00 per share, while the most bearish prices it at US$34.00. This is a very narrow spread of estimates, implying either that Proto Labs is an easy company to value, or - more likely - the analysts are relying heavily on some key 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 pretty clear that there is an expectation that Proto Labs' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.6% growth on an annualised basis. This is compared to a historical growth rate of 2.6% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 3.6% annually. Factoring in the forecast slowdown in growth, it seems obvious that Proto Labs is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Proto Labs. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Proto Labs' revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$39.50, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Proto Labs. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Proto Labs going out to 2025, and you can see them free on our platform here..

We also provide an overview of the Proto Labs Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.