Puma Biotechnology, Inc. (NASDAQ:PBYI) defied analyst predictions to release its first-quarter results, which were ahead of market expectations. Puma Biotechnology outperformed on both revenues and the expected loss per share, with revenues of US$51m beating estimates by 15%. Statutory losses were US$0.43, 44% smaller thanthe analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. 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 most recent consensus for Puma Biotechnology from eight analysts is for revenues of US$243.6m in 2020 which, if met, would be a notable 8.5% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 51% to US$1.04. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$248.7m and losses of US$1.38 per share in 2020. Although the revenue estimates have fallen somewhat, Puma Biotechnology'sfuture looks a little different to the past, with a the loss per share forecasts in particular.
The consensus price target was broadly unchanged at US$12.11, implying that the business is performing roughly in line with expectations, despite adjustments to both revenue and earnings estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Puma Biotechnology at US$15.00 per share, while the most bearish prices it at US$6.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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. One thing stands out from these estimates, which is that Puma Biotechnology is forecast to grow faster in the future than it has in the past, with revenues expected to grow 8.5%. If achieved, this would be a much better result than the 21% annual decline over the past year. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 22% next year. Although Puma Biotechnology's revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for 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. Yet - earnings are more important to the intrinsic value of the business. The consensus price target held steady at US$12.11, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Puma Biotechnology going out to 2024, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 2 warning signs for Puma Biotechnology you should be aware of.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.