- Oops!Something went wrong.Please try again later.
Biohaven Pharmaceutical Holding Company Ltd. (NYSE:BHVN) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts have sharply increased their revenue numbers, with a view that Biohaven Pharmaceutical Holding will make substantially more sales than they'd previously expected.
After this upgrade, Biohaven Pharmaceutical Holding's twelve analysts are now forecasting revenues of US$349m in 2021. This would be a sizeable 228% improvement in sales compared to the last 12 months. Losses are presumed to reduce, shrinking 14% from last year to US$12.33. Yet before this consensus update, the analysts had been forecasting revenues of US$314m and losses of US$12.54 per share in 2021. So there's been quite a change-up of views after the recent consensus updates, withthe analysts noticeably increasing their revenue forecasts while also expecting losses per share to hold steady.
Analysts increased their price target 7.1% to US$127, perhaps signalling that higher revenues are a strong leading indicator for Biohaven Pharmaceutical Holding's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Biohaven Pharmaceutical Holding, with the most bullish analyst valuing it at US$145 and the most bearish at US$101 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
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 pretty clear that there is an expectation that Biohaven Pharmaceutical Holding's revenue growth will slow down substantially, with revenues to the end of 2021 expected to display 4x growth on an annualised basis. This is compared to a historical growth rate of 9,135% over the past year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% per year. So it's pretty clear that, while Biohaven Pharmaceutical Holding's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around Biohaven Pharmaceutical Holding's prospects. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Biohaven Pharmaceutical Holding.
These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 4 potential risks with Biohaven Pharmaceutical Holding, including dilutive stock issuance over the past year. You can learn more, and discover the 3 other risks we've identified, for free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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 (at) simplywallst.com.