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A week ago, Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. Revenues and losses per share were both better than expected, with revenues of US$18m leading estimates by 6.7%. Statutory losses were smaller than the analystsexpected, coming in at US$0.08 per share. Following the result, the 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following last week's earnings report, Rigel Pharmaceuticals' six analysts are forecasting 2021 revenues to be US$107.7m, approximately in line with the last 12 months. Losses are forecast to balloon 109% to US$0.34 per share. Before this latest report, the consensus had been expecting revenues of US$110.9m and US$0.30 per share in losses. So it's pretty clear the analysts have mixed opinions on Rigel Pharmaceuticals after this update; revenues were downgraded and per-share losses expected to increase.
There was no major change to the consensus price target of US$7.14, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Rigel Pharmaceuticals, with the most bullish analyst valuing it at US$8.00 and the most bearish at US$5.00 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.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Rigel Pharmaceuticals' revenue growth will slow down substantially, with revenues next year expected to grow 2.0%, compared to a historical growth rate of 39% over the past five 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 Rigel Pharmaceuticals.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Rigel Pharmaceuticals. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Rigel 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.
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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