It's been a sad week for ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD), who've watched their investment drop 13% to US$39.10 in the week since the company reported its yearly result. The results overall were pretty much dead in line with analyst forecasts; revenues were US$339m and statutory losses were US$1.60 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on ACADIA Pharmaceuticals after the latest results.
Following the latest results, ACADIA Pharmaceuticals's 14 analysts are now forecasting revenues of US$457.6m in 2020. This would be a substantial 35% improvement in sales compared to the last 12 months. Losses are expected to be contained, narrowing 16% from last year to US$1.85, on a statutory basis. Before this earnings announcement, analysts had been forecasting revenues of US$458.7m and losses of US$1.30 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$55.88, with analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values ACADIA Pharmaceuticals at US$75.00 per share, while the most bearish prices it at US$41.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
In addition, we can look to ACADIA Pharmaceuticals's past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. We would highlight that ACADIA Pharmaceuticals's revenue growth is expected to slow, with forecast 35% increase next year well below the historical 66%p.a. growth over the last five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 16% next year. So it's pretty clear that, while ACADIA Pharmaceuticals'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. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that ACADIA Pharmaceuticals's revenues are expected to grow faster than the wider market. The consensus price target held steady at US$55.88, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that in mind, we wouldn't be too quick to come to a conclusion on ACADIA Pharmaceuticals. 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 ACADIA Pharmaceuticals going out to 2024, and you can see them free on our platform here..
We also provide an overview of the ACADIA Pharmaceuticals Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
If you spot an error that warrants correction, please contact the editor at email@example.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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