These Analysts Just Made A Huge Downgrade To Their Enanta Pharmaceuticals, Inc. (NASDAQ:ENTA) EPS Forecasts
The analysts covering Enanta Pharmaceuticals, Inc. (NASDAQ:ENTA) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business. Shares are up 5.2% to US$54.59 in the past week. It will be interesting to see if this downgrade motivates investors to start selling their holdings.
After this downgrade, Enanta Pharmaceuticals' nine analysts are now forecasting revenues of US$108m in 2023. This would be a huge 25% improvement in sales compared to the last 12 months. Per-share losses are expected to explode, reaching US$7.71 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$130m and losses of US$5.84 per share in 2023. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.
Check out our latest analysis for Enanta Pharmaceuticals
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. One thing stands out from these estimates, which is that Enanta Pharmaceuticals is forecast to grow faster in the future than it has in the past, with revenues expected to display 35% annualised growth until the end of 2023. If achieved, this would be a much better result than the 16% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 15% annually. Not only are Enanta Pharmaceuticals' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for this year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Given the serious cut to this year's outlook, it's clear that analysts have turned more bearish on Enanta Pharmaceuticals, and we wouldn't blame shareholders for feeling a little more cautious themselves.
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 Enanta Pharmaceuticals analysts - going out to 2025, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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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