Neuren Pharmaceuticals Limited Just Missed Earnings - But Analysts Have Updated Their Models
Last week, you might have seen that Neuren Pharmaceuticals Limited (ASX:NEU) released its yearly result to the market. The early response was not positive, with shares down 5.0% to AU$19.71 in the past week. It was not a great result overall. While revenues of AU$232m were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 11% to hit AU$1.20 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for Neuren Pharmaceuticals
Taking into account the latest results, the current consensus, from the five analysts covering Neuren Pharmaceuticals, is for revenues of AU$153.7m in 2024. This implies a disturbing 34% reduction in Neuren Pharmaceuticals' revenue over the past 12 months. Statutory earnings per share are forecast to plunge 49% to AU$0.63 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of AU$133.9m and earnings per share (EPS) of AU$0.55 in 2024. So we can see there's been a pretty clear increase in sentiment following the latest results, with both revenues and earnings per share receiving a decent lift in the latest estimates.
Despite these upgrades,the analysts have not made any major changes to their price target of AU$26.74, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. Currently, the most bullish analyst values Neuren Pharmaceuticals at AU$31.00 per share, while the most bearish prices it at AU$22.80. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Neuren Pharmaceuticals' past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 34% by the end of 2024. This indicates a significant reduction from annual growth of 80% 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 18% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Neuren Pharmaceuticals is expected to lag the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Neuren Pharmaceuticals following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Neuren Pharmaceuticals going out to 2026, and you can see them free on our platform here.
You can also see our analysis of Neuren Pharmaceuticals' Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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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.
