As you might know, Puma Biotechnology, Inc. (NASDAQ:PBYI) last week released its latest quarterly, and things did not turn out so great for shareholders. It was a pretty negative result overall, with revenues of US$51m missing analyst predictions by 4.1%. Worse, the business reported a statutory loss of US$0.79 per share, much larger than the analysts had forecast prior to the result. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Puma Biotechnology after the latest results.
Taking into account the latest results, the most recent consensus for Puma Biotechnology from eight analysts is for revenues of US$249.0m in 2021 which, if met, would be a reasonable 5.8% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 34% to US$0.94. Before this earnings announcement, the analysts had been modelling revenues of US$257.4m and losses of US$0.70 per share in 2021. So it's pretty clear the analysts have mixed opinions on Puma Biotechnology after this update; revenues were downgraded and per-share losses expected to increase.
The consensus price target fell 11% to US$10.33, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Puma Biotechnology analyst has a price target of US$16.00 per share, while the most pessimistic values it at US$6.00. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Puma Biotechnology's past performance and to peers in the same industry. We would highlight that Puma Biotechnology's revenue growth is expected to slow, with forecast 5.8% increase next year well below the historical 40%p.a. growth over the last three years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 21% next year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Puma Biotechnology.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Puma Biotechnology's future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Puma Biotechnology going out to 2024, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 3 warning signs for Puma Biotechnology that you should be aware of.
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 firstname.lastname@example.org.