Knight Therapeutics Inc. Just Missed Earnings With A Surprise Loss - Here Are Analysts Latest Forecasts
Last week saw the newest full-year earnings release from Knight Therapeutics Inc. (TSE:GUD), an important milestone in the company's journey to build a stronger business. Things were not great overall, with a surprise (statutory) loss of CA$0.16 per share on revenues of CA$328m, even though the analysts had been expecting a profit. 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 Knight Therapeutics after the latest results.
View our latest analysis for Knight Therapeutics
After the latest results, the four analysts covering Knight Therapeutics are now predicting revenues of CA$345.5m in 2024. If met, this would reflect a reasonable 5.3% improvement in revenue compared to the last 12 months. Knight Therapeutics is also expected to turn profitable, with statutory earnings of CA$0.03 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$332.5m and earnings per share (EPS) of CA$0.033 in 2024. Overall it looks as though the analysts were a bit mixed on the latest results. Although there was a a reasonable to revenue, the consensus also made a minor downgrade to its earnings per share forecasts.
There's been no major changes to the price target of CA$6.64, suggesting that the impact of higher forecast revenue and lower earnings won't result in a meaningful change to the business' valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Knight Therapeutics analyst has a price target of CA$7.60 per share, while the most pessimistic values it at CA$5.25. 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 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. It's pretty clear that there is an expectation that Knight Therapeutics' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 5.3% growth on an annualised basis. This is compared to a historical growth rate of 38% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.3% annually. Factoring in the forecast slowdown in growth, it seems obvious that Knight Therapeutics is also expected to grow slower than other industry participants.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Knight Therapeutics. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. The consensus price target held steady at CA$6.64, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Knight Therapeutics going out to 2026, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
