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The latest analyst coverage could presage a bad day for Quidel Corporation (NASDAQ:QDEL), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.
Following the downgrade, the most recent consensus for Quidel from its five analysts is for revenues of US$2.4b in 2021 which, if met, would be a sizeable 47% increase on its sales over the past 12 months. Per-share earnings are expected to jump 44% to US$27.78. Prior to this update, the analysts had been forecasting revenues of US$2.9b and earnings per share (EPS) of US$33.86 in 2021. Indeed, we can see that the analysts are a lot more bearish about Quidel's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.
Check out our latest analysis for Quidel
It'll come as no surprise then, to learn that the analysts have cut their price target 17% to US$227. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Quidel, with the most bullish analyst valuing it at US$341 and the most bearish at US$120 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.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The period to the end of 2021 brings more of the same, according to the analysts, with revenue forecast to display 47% growth on an annualised basis. That is in line with its 39% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 9.0% per year. So although Quidel is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Quidel.