Paratek Pharmaceuticals, Inc. Just Reported Yearly Earnings And Analysts Are Lifting Their Estimates
The investors in Paratek Pharmaceuticals, Inc.'s (NASDAQ:PRTK) will be rubbing their hands together with glee today, after the share price leapt 20% to US$4.32 in the week following its annual results. It looks like a moderately negative result overall with revenues falling 14% short of analyst estimates at US$17m. Statutory losses were US$3.93 per share, roughly in line with what analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.
Check out our latest analysis for Paratek Pharmaceuticals
Taking into account the latest results, the current consensus from Paratek Pharmaceuticals's five analysts is for revenues of US$83.2m in 2020, which would reflect a sizeable 403% increase on its sales over the past 12 months. Per-share statutory losses are expected to explode, reaching US$2.62 per share. Yet prior to the latest earnings, analysts had been forecasting revenues of US$77.3m and losses of US$2.61 per share in 2020. There's been a pretty noticeable increase in sentiment, with analysts upgrading revenues and making a earnings per share in particular
There were no major changes to the US$16.80 consensus price target despite the higher revenue estimates, with analysts seeming to believe that ongoing losses have a larger impact on the valuation than growing sales. 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 Paratek Pharmaceuticals at US$34.00 per share, while the most bearish prices it at US$6.00. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. It's clear from the latest estimates that Paratek Pharmaceuticals's rate of growth is expected to accelerate meaningfully, with forecast 403% revenue growth noticeably faster than its historical growth of 36%p.a. 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 5.1% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Paratek Pharmaceuticals is expected to grow much faster than its market.
The Bottom Line
The most important thing to note from these estimates is that the consensus increased its forecast losses next year, suggesting all may not be well at Paratek Pharmaceuticals. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider market. The consensus price target held steady at US$16.80, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Paratek Pharmaceuticals going out to 2024, and you can see them free on our platform here..
It might also be worth considering whether Paratek Pharmaceuticals's debt load is appropriate, using our debt analysis tools on the Simply Wall St 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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