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It's been a good week for Albireo Pharma, Inc. (NASDAQ:ALBO) shareholders, because the company has just released its latest third-quarter results, and the shares gained 4.1% to US$32.84. Revenues of US$2.1m crushed expectations, although expenses also blew out, with the company reporting a statutory loss per share of US$1.96, 30% bigger than analysts expected. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Albireo Pharma after the latest results.
Taking into account the latest results, the current consensus from Albireo Pharma's seven analysts is for revenues of US$15.2m in 2021, which would reflect a substantial 26% increase on its sales over the past 12 months. Per-share losses are predicted to creep up to US$6.52. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$15.1m and losses of US$7.11 per share in 2021. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrade to loss per share forecasts for next year.
There's been no major changes to the consensus price target of US$67.75, suggesting that reduced loss estimates are not enough to have a long-term positive impact on 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. There are some variant perceptions on Albireo Pharma, with the most bullish analyst valuing it at US$79.00 and the most bearish at US$62.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Albireo Pharma's growth to accelerate, with the forecast 26% growth ranking favourably alongside historical growth of 2.5% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 20% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Albireo Pharma is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Albireo Pharma analysts - going out to 2024, and you can see them free on our platform here.
You still need to take note of risks, for example - Albireo Pharma has 3 warning signs we think you should be aware of.
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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