Analysts Just Shipped A Stunning Upgrade To Their Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA) Estimates
Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.
After the upgrade, the consensus from Momenta Pharmaceuticals' eleven analysts is for revenues of US$26m in 2020, which would reflect a considerable 11% decline in sales compared to the last year of performance. Losses are predicted to fall substantially, shrinking 39% to US$1.67. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$20m and losses of US$1.99 per share in 2020. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to this year's revenue estimates, while at the same time reducing their loss estimates.
See our latest analysis for Momenta Pharmaceuticals
There was no major change to the consensus price target of US$37.00, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook. 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 Momenta Pharmaceuticals, with the most bullish analyst valuing it at US$50.00 and the most bearish at US$23.00 per share. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One more thing stood out to us about these estimates, and it's the idea that Momenta Pharmaceuticals'decline is expected to accelerate, with revenues forecast to fall 11% next year, topping off a historical decline of 7.9% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 22% per year. So while a broad number of companies are forecast to decline, unfortunately Momenta Pharmaceuticals is expected to see its sales affected worse than other companies in the industry.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Momenta Pharmaceuticals is moving incrementally towards profitability. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Momenta Pharmaceuticals.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Momenta Pharmaceuticals going out to 2024, and you can see them free on our platform here..
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