A week ago, Soligenix, Inc. (NASDAQ:SNGX) came out with a strong set of yearly numbers that could potentially lead to a re-rate of the stock. Revenues of US$4.6m beat estimates by a substantial 22% margin. Unfortunately, Soligenix also reported a statutory loss of US$0.48 per share, which at least was smaller than the analysts expected. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the three analysts covering Soligenix provided consensus estimates of US$3.00m revenue in 2020, which would reflect a painful 35% decline on its sales over the past 12 months. Per-share losses are expected to explode, reaching US$0.65 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$3.60m and losses of US$0.55 per share in 2020. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.
The analysts lifted their price target 18% to US$7.75, implicitly signalling that lower earnings per share are not expected to have a longer-term impact on the stock's 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. Currently, the most bullish analyst values Soligenix at US$12.00 per share, while the most bearish prices it at US$4.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
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. One more thing stood out to us about these estimates, and it's the idea that Soligenix'sdecline is expected to accelerate, with revenues forecast to fall 35% next year, topping off a historical decline of 13% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 15% per year. So while a broad number of companies are forecast to decline, unfortunately Soligenix is expected to see its sales affected worse than other companies in the industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Soligenix. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
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 estimates - from multiple Soligenix analysts - going out to 2024, and you can see them free on our platform here.
Before you take the next step you should know about the 5 warning signs for Soligenix (1 is a bit concerning!) that we have uncovered.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.