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The investors in Infinity Pharmaceuticals, Inc.'s (NASDAQ:INFI) will be rubbing their hands together with glee today, after the share price leapt 37% to US$1.51 in the week following its third-quarter results. Revenues of US$496k crushed expectations, although expenses understandably increased with statutory losses reaching US$0.16 per share, somewhat higher than what the analysts 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 Infinity Pharmaceuticals after the latest results.
Following the latest results, Infinity Pharmaceuticals' three analysts are now forecasting revenues of US$1.91m in 2021. This would be a major 20% improvement in sales compared to the last 12 months. Losses are forecast to narrow 9.9% to US$0.64 per share. Before this earnings announcement, the analysts had been modelling revenues of US$1.71m and losses of US$0.74 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.
It will come as no surprise to learn thatthe analysts have increased their price target for Infinity Pharmaceuticals 8.3% to US$2.17on the back of these upgrades. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Infinity Pharmaceuticals, with the most bullish analyst valuing it at US$3.00 and the most bearish at US$1.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing stands out from these estimates, which is that Infinity Pharmaceuticals is forecast to grow faster in the future than it has in the past, with revenues expected to grow 20%. If achieved, this would be a much better result than the 64% annual decline 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 revenue grow 20% per year. So while Infinity Pharmaceuticals' revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Infinity Pharmaceuticals analysts - going out to 2024, and you can see them free on our platform here.
You still need to take note of risks, for example - Infinity Pharmaceuticals has 5 warning signs we think 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.
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