Enanta Pharmaceuticals, Inc. (NASDAQ:ENTA) Consensus Forecasts Have Become A Little Darker Since Its Latest Report
The analysts might have been a bit too bullish on Enanta Pharmaceuticals, Inc. (NASDAQ:ENTA), given that the company fell short of expectations when it released its quarterly results last week. Unfortunately, Enanta Pharmaceuticals delivered a serious earnings miss. Revenues of US$18m were 18% below expectations, and statutory losses ballooned 29% to US$1.58 per share. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Enanta Pharmaceuticals
Following the recent earnings report, the consensus from eight analysts covering Enanta Pharmaceuticals is for revenues of US$68.8m in 2024. This implies a measurable 6.5% decline in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 21% to US$5.17. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$72.5m and losses of US$4.86 per share in 2024. So it's pretty clear consensus is more negative on Enanta Pharmaceuticals after the new consensus numbers; while the analysts trimmed their revenue estimates, they also administered a moderate increase in per-share loss expectations.
The consensus price target fell 13% to US$20.88, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Enanta Pharmaceuticals, with the most bullish analyst valuing it at US$35.00 and the most bearish at US$11.00 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would also point out that the forecast 8.6% annualised revenue decline to the end of 2024 is better than the historical trend, which saw revenues shrink 26% annually over the past five years Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 17% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Enanta Pharmaceuticals to suffer worse than the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Enanta Pharmaceuticals. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse 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 Enanta 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 Enanta Pharmaceuticals going out to 2026, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 2 warning signs for Enanta Pharmaceuticals you should know about.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
