Forecast: Analysts Think Eton Pharmaceuticals, Inc.'s (NASDAQ:ETON) Business Prospects Have Improved Drastically
Celebrations may be in order for Eton Pharmaceuticals, Inc. (NASDAQ:ETON) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. The stock price has risen 6.4% to US$7.43 over the past week, suggesting investors are becoming more optimistic. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.
Following the upgrade, the current forecast from Eton Pharmaceuticals' three analysts is for revenues of US$35m in 2021, which would reflect a huge improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 63% to US$0.44. Yet before this consensus update, the analysts had been forecasting revenues of US$28m and losses of US$0.59 per share in 2021. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.
See our latest analysis for Eton Pharmaceuticals
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Eton Pharmaceuticals is forecast to grow faster in the future than it has in the past, with revenues expected to grow manyfold. If achieved, this would be a much better result than the 17% annual decline over the past year. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 6.6% per year. So it looks like Eton Pharmaceuticals is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses next year, perhaps suggesting Eton Pharmaceuticals is moving incrementally towards profitability. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. More bullish expectations could be a signal for investors to take a closer look at Eton Pharmaceuticals.
Analysts are clearly in love with Eton Pharmaceuticals at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as dilutive stock issuance over the past year. For more information, you can click through to our platform to learn more about this and the 1 other flag we've identified .
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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