U.S. Markets closed
  • S&P 500

    3,638.35
    +8.70 (+0.24%)
     
  • Dow 30

    29,910.37
    +37.90 (+0.13%)
     
  • Nasdaq

    12,205.85
    +111.44 (+0.92%)
     
  • Russell 2000

    1,855.27
    +10.25 (+0.56%)
     
  • Crude Oil

    45.53
    -0.18 (-0.39%)
     
  • Gold

    1,788.10
    -23.10 (-1.28%)
     
  • Silver

    22.64
    -0.81 (-3.44%)
     
  • EUR/USD

    1.1970
    +0.0057 (+0.4788%)
     
  • 10-Yr Bond

    0.8420
    -0.0360 (-4.10%)
     
  • Vix

    20.84
    -0.41 (-1.93%)
     
  • GBP/USD

    1.3314
    -0.0042 (-0.3169%)
     
  • USD/JPY

    104.0850
    -0.1650 (-0.1583%)
     
  • BTC-USD

    18,097.94
    +329.89 (+1.86%)
     
  • CMC Crypto 200

    333.27
    -4.23 (-1.25%)
     
  • FTSE 100

    6,367.58
    +4.65 (+0.07%)
     
  • Nikkei 225

    26,644.71
    +107.40 (+0.40%)
     

Epizyme, Inc. Annual Results Just Came Out: Here's What Analysts Are Forecasting For Next Year

Simply Wall St
·3 min read

A week ago, Epizyme, Inc. (NASDAQ:EPZM) came out with a strong set of yearly numbers that could potentially lead to a re-rate of the stock. Revenues of US$24m beat estimates by a substantial 23% margin. Unfortunately, Epizyme also reported a statutory loss of US$1.93 per share, which at least was smaller than analysts expected. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.

View our latest analysis for Epizyme

NasdaqGS:EPZM Past and Future Earnings, February 26th 2020
NasdaqGS:EPZM Past and Future Earnings, February 26th 2020

Taking into account the latest results, the current consensus from Epizyme's seven analysts is for revenues of US$36.3m in 2020, which would reflect a huge 52% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 47% (on a statutory basis) to US$2.83. Before this latest report, the consensus had been expecting revenues of US$37.7m and US$2.04 per share in losses. From this we can that analyst sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

There was no major change to the consensus price target of US$28.56, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. 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 Epizyme, with the most bullish analyst valuing it at US$36.00 and the most bearish at US$17.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. Analysts are definitely expecting Epizyme's growth to accelerate, with the forecast 52% growth ranking favourably alongside historical growth of 6.3% per annum over the past five years. Compare this with other companies in the same market, which are forecast to grow their revenue 17% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Epizyme is expected to grow much faster than its market.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses next year, perhaps suggesting Epizyme is moving incrementally towards profitability. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider market. 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Epizyme. Long-term earnings power is much more important than next year's profits. We have forecasts for Epizyme going out to 2024, and you can see them free on our platform here.

You can also see our analysis of Epizyme's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.