Strongbridge Biopharma plc (NASDAQ:SBBP) Analysts Are Pretty Bullish On The Stock After Recent Results
It's been a mediocre week for Strongbridge Biopharma plc (NASDAQ:SBBP) shareholders, with the stock dropping 14% to US$2.77 in the week since its latest full-year results. Strongbridge Biopharma reported revenues of US$31m, in line with expectations, but it unfortunately also reported (statutory) losses of US$0.78 per share, which were slightly larger than expected. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for Strongbridge Biopharma
Taking into account the latest results, the current consensus from Strongbridge Biopharma's six analysts is for revenues of US$35.8m in 2021, which would reflect a notable 17% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 41% to US$0.46. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$35.5m and losses of US$0.60 per share in 2021. Although the revenue estimates have not really changed Strongbridge Biopharma'sfuture looks a little different to the past, with a very promising decrease in the loss per share forecasts in particular.
The average price target rose 5.3% to US$8.00, with the analysts signalling that the forecast reduction in losses would be a positive for the stock's valuation. 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. The most optimistic Strongbridge Biopharma analyst has a price target of US$10.00 per share, while the most pessimistic values it at US$5.00. 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.
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 Strongbridge Biopharma's revenue growth is expected to slow, with the forecast 17% annualised growth rate until the end of 2021 being well below the historical 34% p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.8% per year. Even after the forecast slowdown in growth, it seems obvious that Strongbridge Biopharma is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Strongbridge Biopharma. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Strongbridge Biopharma analysts - going out to 2025, and you can see them free on our platform here.
Even so, be aware that Strongbridge Biopharma is showing 3 warning signs in our investment analysis , you should know about...
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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