Tufin Software Technologies Ltd. Just Reported Yearly Earnings: Have Analysts Changed Their Mind On The Stock?
Last week, you might have seen that Tufin Software Technologies Ltd. (NYSE:TUFN) released its yearly result to the market. The early response was not positive, with shares down 4.1% to US$14.58 in the past week. It was a respectable set of results; while revenues of US$103m were in line with analyst predictions, statutory losses were 13% smaller than expected, with Tufin Software Technologies losing US$1.04 per share. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.
See our latest analysis for Tufin Software Technologies
Taking into account the latest results, the most recent consensus for Tufin Software Technologies from seven analysts is for revenues of US$120.0m in 2020, which is a meaningful 16% increase on its sales over the past 12 months. Statutory losses are expected to reduce, shrinking 20% from last year to US$1.24. Before this earnings announcement, analysts had been forecasting revenues of US$121.4m and losses of US$0.96 per share in 2020. So there's definitely been a decline in analyst sentiment after the latest results, noting the large cut to new EPS forecasts.
As a result, there was no major change to the consensus price target of US$17.79, with analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Tufin Software Technologies at US$22.00 per share, while the most bearish prices it at US$15.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Tufin Software Technologies shareholders.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. It's pretty clear that analysts expect Tufin Software Technologies's revenue growth will slow down substantially, with revenues next year expected to grow 16%, compared to a historical growth rate of 22% over the past year. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% next year. So it's pretty clear that, while Tufin Software Technologies's revenue growth is expected to slow, it's still expected to grow faster than the market itself.
The Bottom Line
The most important thing to take away is that analysts reconfirmed their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. The consensus price target held steady at US$17.79, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Tufin Software Technologies analysts - going out to 2022, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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