It's been a mediocre week for ANI Pharmaceuticals, Inc. (NASDAQ:ANIP) shareholders, with the stock dropping 11% to US$34.38 in the week since its latest quarterly results. Revenues were in line with expectations, at US$50m, while statutory losses ballooned to US$0.59 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, ANI Pharmaceuticals' three analysts currently expect revenues in 2020 to be US$207.1m, approximately in line with the last 12 months. ANI Pharmaceuticals is also expected to turn profitable, with statutory earnings of US$0.97 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$218.6m and earnings per share (EPS) of US$0.97 in 2020. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.
The average price target was reduced 32% to US$45.67, with the lower revenue forecasts indicating negative sentiment towards ANI Pharmaceuticals, even though earnings forecasts were unchanged. 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 ANI Pharmaceuticals at US$49.00 per share, while the most bearish prices it at US$40.00. Even so, with a relatively close grouping of analyst estimates, it looks to us as though the analysts are quite confident in their valuations, suggesting that ANI Pharmaceuticals is an easy business to forecast or that the the analysts are all using similar assumptions.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that ANI Pharmaceuticals' revenue growth will slow down substantially, with revenues next year expected to grow 1.8%, compared to a historical growth rate of 23% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.8% next year. Factoring in the forecast slowdown in growth, it seems obvious that ANI Pharmaceuticals is also expected to grow slower than other industry participants.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. Even so, long term profitability is more important for the value creation process. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of ANI Pharmaceuticals' future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for ANI Pharmaceuticals going out to 2024, and you can see them free on our platform here..
It is also worth noting that we have found 3 warning signs for ANI Pharmaceuticals (1 is a bit concerning!) that you need to take into consideration.
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