FibroGen, Inc. (NASDAQ:FGEN) Analysts Are Cutting Their Estimates: Here's What You Need To Know
FibroGen, Inc. (NASDAQ:FGEN) just released its latest first-quarter report and things are not looking great. Statutory earnings fell substantially short of expectations, with revenues of US$24m missing forecasts by 66%. Losses exploded, with a per-share loss of US$0.89 some 215% below prior forecasts. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for FibroGen
After the latest results, the nine analysts covering FibroGen are now predicting revenues of US$311.9m in 2020. If met, this would reflect a major 21% improvement in sales compared to the last 12 months. Losses are forecast to balloon 83% to US$2.31 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$342.1m and losses of US$0.49 per share in 2020. While this year's revenue estimates dropped there was also a loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
There was no major change to the consensus price target of US$57.89, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. 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. There are some variant perceptions on FibroGen, with the most bullish analyst valuing it at US$80.00 and the most bearish at US$40.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the FibroGen's past performance and to peers in the same industry. The analysts are definitely expecting FibroGen'sgrowth to accelerate, with the forecast 21% growth ranking favourably alongside historical growth of 13% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 22% next year. FibroGen is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at FibroGen. Sadly, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. 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 FibroGen. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple FibroGen analysts - going out to 2024, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with FibroGen , and understanding these should be part of your investment process.
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