Analysts Are Updating Their Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH) Estimates After Its Annual Results
Last week, you might have seen that Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH) released its annual result to the market. The early response was not positive, with shares down 5.0% to US$14.02 in the past week. The results look positive overall; while revenues of US$163m were in line with analyst predictions, statutory losses were 2.1% smaller than expected, with Deciphera Pharmaceuticals losing US$2.29 per share. 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.
Check out our latest analysis for Deciphera Pharmaceuticals
Following the latest results, Deciphera Pharmaceuticals' nine analysts are now forecasting revenues of US$198.8m in 2024. This would be a sizeable 22% improvement in revenue compared to the last 12 months. The loss per share is expected to ameliorate slightly, reducing to US$2.22. Before this latest report, the consensus had been expecting revenues of US$190.6m and US$2.33 per share in losses. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for both revenues and losses per share.
There was no major change to the consensus price target of US$23.50, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Deciphera Pharmaceuticals at US$34.00 per share, while the most bearish prices it at US$9.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Deciphera Pharmaceuticals' revenue growth is expected to slow, with the forecast 22% annualised growth rate until the end of 2024 being well below the historical 46% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 17% per year. So it's pretty clear that, while Deciphera Pharmaceuticals' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Happily, they also upgraded their revenue estimates, and are forecasting them 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 Deciphera Pharmaceuticals. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Deciphera Pharmaceuticals analysts - going out to 2026, 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 3 warning signs with Deciphera Pharmaceuticals , and understanding these should be part of your investment process.
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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.
