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Intra-Cellular Therapies, Inc. (NASDAQ:ITCI) Reported Earnings Last Week And Analysts Are Already Upgrading Their Estimates

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Simply Wall St
·4 min read
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Intra-Cellular Therapies, Inc. (NASDAQ:ITCI) investors will be delighted, with the company turning in some strong numbers with its latest results. Sales crushed expectations at US$7.4m, beating expectations by 26%. Intra-Cellular Therapies reported a statutory loss of US$0.79 per share, which - although not amazing - was much smaller than the analysts predicted. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Intra-Cellular Therapies after the latest results.

See our latest analysis for Intra-Cellular Therapies

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Following the latest results, Intra-Cellular Therapies' eight analysts are now forecasting revenues of US$123.0m in 2021. This would be a substantial 1,081% improvement in sales compared to the last 12 months. Losses are expected to be contained, narrowing 10% from last year to US$2.90. Before this earnings announcement, the analysts had been modelling revenues of US$112.8m and losses of US$2.99 per share in 2021. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrades to both revenue and loss per share forecasts for next year.

Despite these upgrades,the analysts have not made any major changes to their price target of US$48.00, implying that their latest estimates don't have a long term impact on what they think the stock is worth. 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. Currently, the most bullish analyst values Intra-Cellular Therapies at US$80.00 per share, while the most bearish prices it at US$35.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Intra-Cellular Therapies' rate of growth is expected to accelerate meaningfully, with the forecast 11x revenue growth noticeably faster than its historical growth of 87%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.7% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Intra-Cellular Therapies is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. The consensus price target held steady at US$48.00, 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 Intra-Cellular Therapies. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Intra-Cellular Therapies analysts - going out to 2024, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Intra-Cellular Therapies that you should be aware of.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.