OptimizeRx Corporation (NASDAQ:OPRX) missed earnings with its latest third-quarter results, disappointing overly-optimistic forecasters. It definitely looks like a negative result overall with revenues falling 15% short of analyst estimates at US$21m. Statutory losses were US$0.50 per share, 167% bigger than what the analysts expected. 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. 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, OptimizeRx's seven analysts are now forecasting revenues of US$100.0m in 2025. This would be a solid 13% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 56% to US$0.58. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$113.7m and losses of US$0.60 per share in 2025. We can see there's definitely been a change in sentiment in this update, with the analysts administering a meaningful downgrade to next year's revenue estimates, while at the same time reducing their loss estimates.
The consensus price target fell 33% to US$10.29, with the dip in revenue estimates clearly souring sentiment, despite the forecast reduction in losses. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values OptimizeRx at US$17.00 per share, while the most bearish prices it at US$5.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the OptimizeRx's past performance and to peers in the same industry. It's pretty clear that there is an expectation that OptimizeRx's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 11% growth on an annualised basis. This is compared to a historical growth rate of 21% over the past five years. Compare this to the 68 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 9.7% per year. So it's pretty clear that, while OptimizeRx's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. Yet - earnings are more important to the intrinsic value of the business. 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 OptimizeRx. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple OptimizeRx analysts - going out to 2026, and you can see them free on our platform here.
Plus, you should also learn about the 3 warning signs we've spotted with OptimizeRx .
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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.
