There's been a major selloff in Pieris Pharmaceuticals, Inc. (NASDAQ:PIRS) shares in the week since it released its annual report, with the stock down 26% to US$2.16. Revenues came in 59% better than analyst models expected, at US$46m, although statutory losses ballooned 26% to US$0.56, which is much worse than what was forecast. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.
Following the recent earnings report, the consensus fromfive analysts covering Pieris Pharmaceuticals expects revenues of US$35.5m in 2020, implying a disturbing 23% decline in sales compared to the last 12 months. The statutory loss per share is expected to greatly reduce in the near future, narrowing 27% to US$0.71. Before this latest report, the consensus had been expecting revenues of US$31.1m and US$0.89 per share in losses. So we can see there's been a pretty clear increase in analyst sentiment following the latest results, with both revenues and earnings per share receiving a decent lift in the latest estimates.
It will come as no surprise to learn that analysts have increased their price target for Pieris Pharmaceuticals 9.1% to US$8.00 on the back of these upgrades. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Pieris Pharmaceuticals analyst has a price target of US$10.00 per share, while the most pessimistic values it at US$5.00. 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.
Further, we can compare these estimates to past performance, and see how Pieris Pharmaceuticals forecasts compare to the wider market's forecast performance. We would highlight that sales are expected to reverse, with the forecast 23% revenue decline a notable change from historical growth of 50% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same market are forecast to see their revenue grow 16% annually for the foreseeable future. It's pretty clear that Pieris Pharmaceuticals's revenues are expected to perform substantially worse than the wider market.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for next year. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower 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.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Pieris Pharmaceuticals analysts - going out to 2024, 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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