Shareholders in Innate Pharma S.A. (EPA:IPH) had a terrible week, as shares crashed 30% to €4.56 in the week since its latest full-year results. Revenues of €86m came in a modest 5.3% below forecasts. Statutory losses were a relative bright spot though, with a per-share loss of €0.31 coming in a substantial 124% smaller than what analysts had expected. Earnings are an important time for investors, as they can track a company's performance, look at what top 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 analysts' latest (statutory) post-earnings forecasts for next year.
After the latest results, the six analysts covering Innate Pharma are now predicting revenues of €101.1m in 2020. If met, this would reflect a solid 18% improvement in sales compared to the last 12 months. Statutory losses are forecast to balloon 84% to €0.05 per share. Before this earnings announcement, analysts had been forecasting revenues of €121.9m and losses of €0.30 per share in 2020. So there's been quite a change-up of views after the latest results, with analysts making a serious cut to their revenue forecasts while also granting a massive increase in to the earnings per share numbers.
There was no major change to the €12.05 average analyst price target, suggesting that the adjustments to revenue and earnings are not expected to have a long-term impact on the business. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Innate Pharma at €15.60 per share, while the most bearish prices it at €9.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. We would highlight that Innate Pharma's revenue growth is expected to slow, with forecast 18% increase next year well below the historical 36%p.a. growth over the last five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 33% per year. So it's pretty clear that, while revenue growth is expected to slow down, analysts still expect the wider market to grow faster than Innate Pharma.
The Bottom Line
The most important thing to note from these estimates is that the consensus increased its forecast losses next year, suggesting all may not be well at Innate Pharma. Unfortunately, analysts also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider market. 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. 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.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Innate Pharma going out to 2024, and you can see them free on our platform here.
We also provide an overview of the Innate Pharma Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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