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Amicus Therapeutics, Inc. (NASDAQ:FOLD) shares fell 7.2% to US$9.14 in the week since its latest full-year results. Sales hit US$182m in line with forecasts, although the company reported a statutory loss per share of US$1.48 that was somewhat smaller than analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on Amicus Therapeutics after the latest results.
Taking into account the latest results, the current consensus from Amicus Therapeutics's ten analysts is for revenues of US$254.9m in 2020, which would reflect a substantial 40% increase on its sales over the past 12 months. Statutory losses are forecast to balloon 27% to US$1.08 per share. Yet prior to the latest earnings, analysts had been forecasting revenues of US$254.3m 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 real cut to new EPS forecasts.
The consensus price target held steady at US$18.08, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Amicus Therapeutics analyst has a price target of US$31.00 per share, while the most pessimistic values it at US$10.00. 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 possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Amicus Therapeutics's revenue growth is expected to slow, with forecast 40% increase next year well below the historical 62%p.a. growth over the last five years. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 16% next year. So it's pretty clear that, while Amicus Therapeutics'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. The consensus price target held steady at US$18.08, 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 Amicus Therapeutics. Long-term earnings power is much more important than next year's profits. We have forecasts for Amicus Therapeutics going out to 2024, and you can see them free on our platform here.
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