Earnings Update: Affimed N.V. (NASDAQ:AFMD) Just Reported And Analysts Are Trimming Their Forecasts
Last week, you might have seen that Affimed N.V. (NASDAQ:AFMD) released its yearly result to the market. The early response was not positive, with shares down 2.2% to US$2.19 in the past week. The business exceeded revenue expectations with sales of €21m coming in 8.0% ahead of forecasts. Statutory losses were €0.50 a share, in line with what the analysts predicted. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for Affimed
Taking into account the latest results, the five analysts covering Affimed provided consensus estimates of €17.2m revenue in 2020, which would reflect a not inconsiderable 20% decline on its sales over the past 12 months. Losses are forecast to balloon 39% to €0.70 per share. Before this latest report, the consensus had been expecting revenues of €23.5m and €0.59 per share in losses. There's been a definite change in sentiment in this update, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.
The average price target was broadly unchanged at €6.26, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Affimed at €9.23 per share, while the most bearish prices it at €4.61. 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. We would highlight that sales are expected to reverse, with the forecast 20% revenue decline a notable change from historical growth of 44% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 17% annually for the foreseeable future. It's pretty clear that Affimed's revenues are expected to perform substantially worse 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. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse 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.
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. We have estimates - from multiple Affimed analysts - going out to 2024, 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 Affimed you should be aware of.
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