Genfit SA (EPA:GNFT) Just Released Its Full-Year Earnings: Here's What Analysts Think
A week ago, Genfit SA (EPA:GNFT) came out with a strong set of full-year numbers that could potentially lead to a re-rate of the stock. The results were impressive, with revenues of €41m exceeding analyst forecasts by 92%, and statutory losses of €1.76 were likewise much smaller than the analysts had forecast. Following the result, the 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Genfit after the latest results.
View our latest analysis for Genfit
After the latest results, the consensus from Genfit's seven analysts is for revenues of €21.3m in 2020, which would reflect a painful 48% decline in sales compared to the last year of performance. Losses are forecast to balloon 23% to €2.16 per share. Before this latest report, the consensus had been expecting revenues of €22.9m and €3.14 per share in losses. Although the revenue estimates have fallen somewhat, Genfit'sfuture looks a little different to the past, with a the loss per share forecasts in particular.
There was no major change to the €63.46 average price target, suggesting that the adjustments to revenue and earnings are not expected to have a long-term impact on the business. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Genfit, with the most bullish analyst valuing it at €105 and the most bearish at €17.00 per share. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that sales are expected to slow, with a forecast revenue decline of 48%, a significant reduction from annual growth of 34% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 33% next year. It's pretty clear that Genfit's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Still, earnings are more important to the intrinsic value of the business. The consensus price target held steady at €63.46, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Genfit. Long-term earnings power is much more important than next year's profits. We have forecasts for Genfit going out to 2024, and you can see them free on our platform here.
Plus, you should also learn about the 3 warning signs we've spotted with Genfit .
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