Shareholders of Puma Biotechnology, Inc. (NASDAQ:PBYI) will be pleased this week, given that the stock price is up 11% to US$13.60 following its latest yearly results. The statutory results were mixed overall, with revenues of US$272m in line with analyst forecasts, but losses of US$1.95 per share, some 6.2% larger than analysts were predicting. Following the result, 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. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Puma Biotechnology
NasdaqGS:PBYI Past and Future Earnings, February 23rd 2020
Taking into account the latest results, the eight analysts covering Puma Biotechnology provided consensus estimates of US$253.4m revenue in 2020, which would reflect a perceptible 6.9% decline on its sales over the past 12 months. Statutory losses are expected to increase substantially, hitting US$1.59. per share. Before this earnings announcement, analysts had been forecasting revenues of US$260.9m and losses of US$1.54 per share in 2020. While revenue forecasts have been revised downwards, analysts look to have become more optimistic on the company's earnings power, given the to earnings per share forecasts.
The average analyst price target was broadly unchanged at US$12.33, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Puma Biotechnology at US$17.00 per share, while the most bearish prices it at US$6.00. 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.
In addition, we can look to Puma Biotechnology's past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. We would highlight that sales are expected to reverse, with the forecast 6.9% revenue decline a notable change from historical growth of 8.5% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same market are forecast to see their revenue grow 17% annually for the foreseeable future. It's pretty clear that Puma Biotechnology's revenues are expected to perform substantially worse than the wider market.
The most important thing to take away is that analysts reduced their loss per share estimates for next year, perhaps highlighting increased optimism around Puma Biotechnology's prospects. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider market. The consensus price target held steady at US$12.33, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have forecasts for Puma Biotechnology going out to 2024, and you can see them free on our platform here.
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We also provide an overview of the Puma Biotechnology Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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Puma Biotechnology, Inc. Just Released Its Yearly Earnings: Here's What Analysts Think - Yahoo Finance