Analysts Have Been Trimming Their Rockwell Medical, Inc. (NASDAQ:RMTI) Price Target After Its Latest Report
The investors in Rockwell Medical, Inc.'s (NASDAQ:RMTI) will be rubbing their hands together with glee today, after the share price leapt 22% to US$1.71 in the week following its annual results. Revenues of US$84m were in line with expectations, although statutory losses per share were US$0.36, some 10% smaller than was expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analyst has changed their mind on Rockwell Medical after the latest results.
View our latest analysis for Rockwell Medical
Taking into account the latest results, the current consensus from Rockwell Medical's sole analyst is for revenues of US$89.9m in 2024. This would reflect a satisfactory 7.5% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 69% to US$0.09. Before this earnings announcement, the analyst had been modelling revenues of US$98.0m and losses of US$0.13 per share in 2024. Although the revenue estimate has fallen somewhat, Rockwell Medical'sfuture looks a little different to the past, with a very promising decrease in the loss per share forecasts in particular.
The consensus price target fell 11% to US$8.00, with the dip in revenue estimates clearly souring sentiment, despite the forecast reduction in losses.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Rockwell Medical's rate of growth is expected to accelerate meaningfully, with the forecast 7.5% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 5.2% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.9% annually. Rockwell Medical is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The most important thing to take away is that the analyst reconfirmed their loss per share estimates for next year. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. Still, earnings are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of Rockwell Medical's future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on Rockwell Medical. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.
Even so, be aware that Rockwell Medical is showing 3 warning signs in our investment analysis , and 1 of those is a bit concerning...
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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.
