Fennec Pharmaceuticals Inc. (NASDAQ:FENC) Reported Earnings Last Week And Analysts Are Already Upgrading Their Estimates
A week ago, Fennec Pharmaceuticals Inc. (NASDAQ:FENC) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. The results were impressive, with revenues of US$6.5m exceeding analyst forecasts by 22%, and statutory losses of US$0.07 were likewise much smaller than the analysts had forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Fennec Pharmaceuticals
Taking into account the latest results, the most recent consensus for Fennec Pharmaceuticals from six analysts is for revenues of US$44.0m in 2024. If met, it would imply a huge 237% increase on its revenue over the past 12 months. Fennec Pharmaceuticals is also expected to turn profitable, with statutory earnings of US$0.23 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$41.4m and earnings per share (EPS) of US$0.13 in 2024. So it seems there's been a definite increase in optimism about Fennec Pharmaceuticals' future following the latest results, with a considerable lift to the earnings per share forecasts in particular.
Despite these upgrades,the analysts have not made any major changes to their price target of US$16.40, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. The most optimistic Fennec Pharmaceuticals analyst has a price target of US$17.00 per share, while the most pessimistic values it at US$16.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
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. The analysts are definitely expecting Fennec Pharmaceuticals' growth to accelerate, with the forecast 164% annualised growth to the end of 2024 ranking favourably alongside historical growth of 99% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 15% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Fennec Pharmaceuticals is expected to grow much faster than its industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Fennec Pharmaceuticals following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. 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.
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. We have estimates - from multiple Fennec Pharmaceuticals analysts - going out to 2025, and you can see them free on our platform here.
You still need to take note of risks, for example - Fennec Pharmaceuticals has 3 warning signs (and 1 which is potentially serious) we think you should know about.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
