As you might know, Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) recently reported its third-quarter numbers. Revenues of US$29m fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of US$0.41 an impressive 327% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus from Catalyst Pharmaceuticals' four analysts is for revenues of US$155.0m in 2021, which would reflect a substantial 31% increase on its sales over the past 12 months. Statutory earnings per share are forecast to plunge 41% to US$0.41 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$153.7m and earnings per share (EPS) of US$0.49 in 2021. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.
The consensus price target held steady at US$7.40, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Catalyst Pharmaceuticals, with the most bullish analyst valuing it at US$9.00 and the most bearish at US$5.50 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Catalyst Pharmaceuticals' revenue growth is expected to slow, with forecast 31% increase next year well below the historical 62% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 20% next year. So it's pretty clear that, while Catalyst Pharmaceuticals' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Catalyst Pharmaceuticals. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$7.40, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Catalyst Pharmaceuticals going out to 2024, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Catalyst Pharmaceuticals (1 is a bit unpleasant) 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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