Pacira BioSciences, Inc. Released Earnings Last Week And Analysts Lifted Their Price Target To US$58.60
Pacira BioSciences, Inc. (NASDAQ:PCRX) shares fell 3.0% to US$48.49 in the week since its latest annual results. Revenues of US$421m arrived in line with expectations, although statutory losses per share were US$0.27, an impressive 3500% smaller than what broker models predicted. 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. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Pacira BioSciences
After the latest results, the 13 analysts covering Pacira BioSciences are now predicting revenues of US$492.3m in 2020. If met, this would reflect a decent 17% improvement in sales compared to the last 12 months. Pacira BioSciences is also expected to turn profitable, with statutory earnings of US$1.39 per share. Before this earnings report, analysts had been forecasting revenues of US$492.1m and earnings per share (EPS) of US$0.98 in 2020. There was no real change to the revenue estimates, but analysts do seem more bullish on earnings, given the very substantial lift in earnings per share expectations following these results.
The consensus price target rose 5.0% to US$58.60, suggesting that higher earnings estimates flow through to the stock's valuation as well. 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 Pacira BioSciences at US$85.00 per share, while the most bearish prices it at US$46.00. 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.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the Pacira BioSciences's past performance and to peers in the same market. Analysts are definitely expecting Pacira BioSciences's growth to accelerate, with the forecast 17% growth ranking favourably alongside historical growth of 12% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.3% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Pacira BioSciences is expected to grow much faster than its market.
The Bottom Line
The most important thing to take away from this is that analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Pacira BioSciences following these results. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. Analysts also upgraded their price target, suggesting that analysts believe the intrinsic value of the business is likely to improve over time.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Pacira BioSciences analysts - going out to 2024, and you can see them free on our platform here.
You can also see whether Pacira BioSciences is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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