A week ago, Aerie Pharmaceuticals, Inc. (NASDAQ:AERI) came out with a strong set of full-year numbers that could potentially lead to a re-rate of the stock. Aerie Pharmaceuticals beat expectations with revenues of US$70m arriving 8.1% ahead of forecasts. The company also reported a statutory loss of US$4.39, 10.0% smaller than was expected. 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.
Taking into account the latest results, the most recent consensus for Aerie Pharmaceuticals from twelve analysts is for revenues of US$102.7m in 2020, which is a major 47% increase on its sales over the past 12 months. Statutory losses are forecast to balloon 24% to US$3.32 per share. Before this earnings announcement, analysts had been forecasting revenues of US$101.0m and losses of US$3.01 per share in 2020. So there's definitely been a decline in analyst sentiment after the latest results, noting the substantial drop in new EPS forecasts.
As a result, there was no major change to the consensus price target of US$37.15, with analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. The most optimistic Aerie Pharmaceuticals analyst has a price target of US$54.00 per share, while the most pessimistic values it at US$23.00. 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.
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 Aerie Pharmaceuticals's revenue growth will slow down substantially, with revenues next year expected to grow 47%, compared to a historical growth rate of 189% over the past year. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 5.1% next year. So it's pretty clear that, while Aerie Pharmaceuticals's revenue growth is expected to slow, it's still expected to grow faster than the market itself.
The Bottom Line
The most obvious conclusion is that analysts made no changes to their forecasts for a loss next year. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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 Aerie Pharmaceuticals analysts - going out to 2024, and you can see them free on our platform here.
We also provide an overview of the Aerie Pharmaceuticals Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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