It's been a mediocre week for Cerus Corporation (NASDAQ:CERS) shareholders, with the stock dropping 14% to US$5.31 in the week since its latest quarterly results. It looks like a positive result overall, with revenues of US$19m beating forecasts by 6.3%. Statutory losses of US$0.10 per share were roughly in line with what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Cerus after the latest results.
Taking into account the latest results, the consensus forecast from Cerus' four analysts is for revenues of US$89.7m in 2020, which would reflect a meaningful 18% improvement in sales compared to the last 12 months. Losses are expected to be contained, narrowing 15% from last year to US$0.40. Before this latest report, the consensus had been expecting revenues of US$91.6m and US$0.39 per share in losses. Overall it looks as though the analysts are negative in this update. Although sales forecasts held steady, the consensus also made a to its losses per share forecasts.
The average price target was broadly unchanged at US$8.00, perhaps implicitly signalling that the weaker earnings outlook is 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. Currently, the most bullish analyst values Cerus at US$9.50 per share, while the most bearish prices it at US$6.50. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Cerus' past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Cerus'historical trends, as next year's 18% revenue growth is roughly in line with 19% annual revenue growth 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 revenues grow 9.0% per year. So although Cerus is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. They also downgraded their revenue estimates, although industry data suggests that Cerus' revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$8.00, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Cerus going out to 2022, and you can see them free on our platform here..
You should always think about risks though. Case in point, we've spotted 3 warning signs for Cerus you should be aware of.
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