BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) defied analyst predictions to release its quarterly results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 4.9% to hit US$477m. BioMarin Pharmaceutical also reported a statutory profit of US$4.01, which was an impressive 287% above what the analysts had forecast. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the 21 analysts covering BioMarin Pharmaceutical are now predicting revenues of US$1.97b in 2021. If met, this would reflect an okay 5.8% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to plummet 92% to US$0.40 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.03b and earnings per share (EPS) of US$0.71 in 2021. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.
Despite the cuts to forecast earnings, there was no real change to the US$108 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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 BioMarin Pharmaceutical analyst has a price target of US$187 per share, while the most pessimistic values it at US$80.00. 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 BioMarin Pharmaceutical's past performance and to peers in the same industry. We would highlight that BioMarin Pharmaceutical's revenue growth is expected to slow, with forecast 5.8% increase next year well below the historical 15%p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 20% next year. Factoring in the forecast slowdown in growth, it seems obvious that BioMarin Pharmaceutical is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. 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 held steady at US$108, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for BioMarin Pharmaceutical going out to 2024, and you can see them free on our platform here.
You still need to take note of risks, for example - BioMarin Pharmaceutical has 2 warning signs we think 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.
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