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Earnings Beat: Armata Pharmaceuticals Inc. (NYSEMKT:ARMP) Just Beat Analyst Forecasts, And Analysts Have Been Lifting Their Forecasts

Simply Wall St
·3 min read

As you might know, Armata Pharmaceuticals Inc. (NYSEMKT:ARMP) last week released its latest third-quarter, and things did not turn out so great for shareholders. Statutory earnings fell substantially short of expectations, with revenues of US$288k missing forecasts by 34%. Losses exploded, with a per-share loss of US$0.31 some 25% below prior forecasts. 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. 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 Armata Pharmaceuticals

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Taking into account the latest results, the consensus forecast from Armata Pharmaceuticals' four analysts is for revenues of US$3.25m in 2021, which would reflect a huge 919% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 45% to US$0.78. Before this earnings announcement, the analysts had been modelling revenues of US$1.75m and losses of US$0.89 per share in 2021. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

Yet despite these upgrades, the analysts cut their price target 6.5% to US$7.25, implicitly signalling that the ongoing losses are likely to weigh negatively on Armata Pharmaceuticals' valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Armata Pharmaceuticals at US$9.00 per share, while the most bearish prices it at US$5.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Armata Pharmaceuticals' future valuation.

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 Armata Pharmaceuticals going out to 2024, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 5 warning signs for Armata Pharmaceuticals (3 are concerning!) that you should be aware of.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.