Here's What Analysts Are Forecasting For Osmotica Pharmaceuticals plc (NASDAQ:OSMT) After Its First-Quarter Results
A week ago, Osmotica Pharmaceuticals plc (NASDAQ:OSMT) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. Results overall were solid, with revenues arriving 6.9% better than analyst forecasts at US$49m. Higher revenues also resulted in substantially lower statutory losses which, at US$0.05 per share, were 6.9% smaller than the analysts expected. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Osmotica Pharmaceuticals
Taking into account the latest results, the five analysts covering Osmotica Pharmaceuticals provided consensus estimates of US$172.9m revenue in 2020, which would reflect a substantial 25% decline on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 85% to US$0.73. Before this latest report, the consensus had been expecting revenues of US$177.0m and US$0.85 per share in losses. While the revenue estimates fell, sentiment seems to have improved, with the analysts making a losses per share in particular.
There was no major change to the US$8.00 average price target, suggesting that the adjustments to revenue and earnings are not expected to have a long-term impact on the business. 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 Osmotica Pharmaceuticals, with the most bullish analyst valuing it at US$10.00 and the most bearish at US$4.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One more thing stood out to us about these estimates, and it's the idea that Osmotica Pharmaceuticals'decline is expected to accelerate, with revenues forecast to fall 25% next year, topping off a historical decline of 11% a year over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 6.2% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Osmotica Pharmaceuticals to suffer 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. Yet - earnings are more important to the intrinsic value of the business. 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Osmotica Pharmaceuticals going out to 2024, and you can see them free on our platform here.
It is also worth noting that we have found 2 warning signs for Osmotica Pharmaceuticals that you need to take into consideration.
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