Tufin Software Technologies Ltd. (NYSE:TUFN) just released its quarterly report and things are looking bullish. Revenues and losses per share were both better than expected, with revenues of US$26m leading estimates by 8.5%. Statutory losses were smaller than the analystsexpected, coming in at US$0.14 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following the latest results, Tufin Software Technologies' nine analysts are now forecasting revenues of US$109.3m in 2021. This would be a meaningful 9.3% improvement in sales compared to the last 12 months. The loss per share is expected to ameliorate slightly, reducing to US$0.99. Before this earnings announcement, the analysts had been modelling revenues of US$112.2m and losses of US$1.14 per share in 2021. While the revenue estimates fell, sentiment seems to have improved, with the analysts making a losses per share in particular.
The analysts have cut their price target 9.5% to US$11.17per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses. 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. There are some variant perceptions on Tufin Software Technologies, with the most bullish analyst valuing it at US$15.00 and the most bearish at US$8.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Tufin Software Technologies' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Tufin Software Technologies' revenue growth will slow down substantially, with revenues next year expected to grow 9.3%, compared to a historical growth rate of 14% over the past three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 13% per year. Factoring in the forecast slowdown in growth, it seems obvious that Tufin Software Technologies is also expected to grow slower than other industry participants.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. Still, earnings per share are more important to value creation for shareholders. 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 Tufin Software Technologies. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Tufin Software Technologies analysts - going out to 2022, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted > 3 warning signs for Tufin Software Technologies
> 3 warning signs for Tufin Software Technologiesyou should know about.
This article by Simply Wall St is general in nature. 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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Source : https://uk.news.yahoo.com/tufin-software-technologies-ltd-nyse-133727886.html
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