Things Look Grim For Enanta Pharmaceuticals, Inc. (NASDAQ:ENTA) After Today's Downgrade
One thing we could say about the analysts on Enanta Pharmaceuticals, Inc. (NASDAQ:ENTA) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.
Following the downgrade, the most recent consensus for Enanta Pharmaceuticals from its nine analysts is for revenues of US$102m in 2024 which, if met, would be a substantial 26% increase on its sales over the past 12 months. Per-share losses are expected to creep up to US$6.72. Yet before this consensus update, the analysts had been forecasting revenues of US$124m and losses of US$5.65 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.
View our latest analysis for Enanta Pharmaceuticals
The consensus price target fell 28% to US$30.22, implicitly signalling that lower earnings per share are a leading indicator for Enanta Pharmaceuticals' valuation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Enanta Pharmaceuticals is forecast to grow faster in the future than it has in the past, with revenues expected to display 20% annualised growth until the end of 2024. If achieved, this would be a much better result than the 25% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 15% annually. So it looks like Enanta Pharmaceuticals is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for next year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Enanta Pharmaceuticals.
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 Enanta Pharmaceuticals analysts - going out to 2025, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
