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Alpine Immune Sciences, Inc. (NASDAQ:ALPN) just released its quarterly report and things are looking bullish. Sales crushed expectations at US$1.1m, beating expectations by 190%. Alpine Immune Sciences reported a statutory loss of US$0.30 per share, which - although not amazing - was much smaller than the analysts predicted. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus, from the three analysts covering Alpine Immune Sciences, is for revenues of US$1.09m in 2020, which would reflect a painful 61% reduction in Alpine Immune Sciences' sales over the past 12 months. Losses are predicted to fall substantially, shrinking 27% to US$1.38. Before this earnings announcement, the analysts had been modelling revenues of US$1.13m and losses of US$1.94 per share in 2020. While the revenue estimates fell, sentiment seems to have improved, with the analysts making a losses per share in particular.
The consensus price target fell 7.8% to US$11.75, 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. There are some variant perceptions on Alpine Immune Sciences, with the most bullish analyst valuing it at US$17.00 and the most bearish at US$8.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. Over the past three years, revenues have declined around 26% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for a 61% decline in revenue next year. Compare this against analyst estimates for companies in the wider industry, which suggest that revenues (in aggregate) are expected to grow 24% next year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Alpine Immune Sciences to suffer worse than the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Alpine Immune Sciences' future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Alpine Immune Sciences analysts - going out to 2024, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 6 warning signs with Alpine Immune Sciences (at least 2 which shouldn't be ignored) , and understanding them should be part of your investment process.
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