Analysts Have Just Cut Their KemPharm, Inc. (NASDAQ:KMPH) Revenue Estimates By 11%
Today is shaping up negative for KemPharm, Inc. (NASDAQ:KMPH) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.
After this downgrade, KemPharm's four analysts are now forecasting revenues of US$19m in 2023. This would be a huge 81% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 36% to US$0.65. Yet before this consensus update, the analysts had been forecasting revenues of US$22m and losses of US$0.65 per share in 2023. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also making no real change to the loss per share numbers.
See our latest analysis for KemPharm
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that KemPharm's rate of growth is expected to accelerate meaningfully, with the forecast 61% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 47% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 3.9% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect KemPharm to grow faster than the wider industry.
The Bottom Line
While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of KemPharm going forwards.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for KemPharm going out to 2024, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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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.
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