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Analysts Have Made A Financial Statement On Revance Therapeutics, Inc.'s (NASDAQ:RVNC) Third-Quarter Report

Simply Wall St
·4 min read

Last week, you might have seen that Revance Therapeutics, Inc. (NASDAQ:RVNC) released its third-quarter result to the market. The early response was not positive, with shares down 6.3% to US$25.74 in the past week. Revenues of US$3.8m crushed expectations, although expenses also blew out, with the company reporting a statutory loss per share of US$1.34, 29% bigger than analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Revance Therapeutics

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earnings-and-revenue-growth

Following the latest results, Revance Therapeutics' nine analysts are now forecasting revenues of US$103.7m in 2021. This would be a substantial 2,323% improvement in sales compared to the last 12 months. Losses are supposed to decline, shrinking 11% from last year to US$4.15. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$94.9m and losses of US$3.94 per share in 2021. So it's pretty clear consensus is mixed on Revance Therapeutics after the new consensus numbers; while the analysts lifted revenue numbers, they also administered a per-share loss expectations.

The consensus price target stayed unchanged at US$35.91, seeming to suggest that higher forecast losses are not expected to have a long term impact on the valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Revance Therapeutics analyst has a price target of US$55.00 per share, while the most pessimistic values it at US$23.00. This is a fairly broad spread of estimates, suggesting that 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. It's clear from the latest estimates that Revance Therapeutics' rate of growth is expected to accelerate meaningfully, with the forecast 20x revenue growth noticeably faster than its historical growth of 40%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.6% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Revance Therapeutics is expected to grow much faster than its industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Revance Therapeutics. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Revance Therapeutics. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Revance Therapeutics analysts - going out to 2024, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 4 warning signs with Revance Therapeutics , and understanding them should be part of your investment process.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.