Checkpoint Therapeutics, Inc. (NASDAQ:CKPT) Reported Earnings Last Week And Analysts Are Already Upgrading Their Estimates
A week ago, Checkpoint Therapeutics, Inc. (NASDAQ:CKPT) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. The results were impressive, with revenues of US$972k exceeding analyst forecasts by 69%, and statutory losses of US$0.06 were likewise much smaller than the analysts had forecast. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
View our latest analysis for Checkpoint Therapeutics
Following the recent earnings report, the consensus from three analysts covering Checkpoint Therapeutics is for revenues of US$1.69m in 2020, implying a sizeable 28% decline in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 40% to US$0.33. Before this latest report, the consensus had been expecting revenues of US$1.53m and US$0.54 per share in losses. So it seems there's been a definite increase in optimism about Checkpoint Therapeutics' future following the latest consensus numbers, with a the loss per share forecasts in particular.
Yet despite these upgrades, the analysts cut their price target 8.5% to US$14.33, implicitly signalling that the ongoing losses are likely to weigh negatively on Checkpoint Therapeutics' valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Checkpoint Therapeutics at US$20.00 per share, while the most bearish prices it at US$8.00. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Checkpoint Therapeutics' past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast revenue decline of 28%, a significant reduction from annual growth of 18% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 20% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Checkpoint Therapeutics is expected to lag the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Checkpoint Therapeutics analysts - going out to 2022, 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 7 warning signs with Checkpoint Therapeutics (at least 3 which are a bit concerning) , and understanding them should be part of your investment process.
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