Last week, you might have seen that PharmaCielo Ltd. (CVE:PCLO) released its quarterly result to the market. The early response was not positive, with shares down 5.6% to CA$0.84 in the past week. Statutory results overall were mixed, with revenues coming in 47% lower than the analysts predicted. What's really surprising is that losses of CA$0.07 per share were 22% smaller than what was predicted. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following the latest results, PharmaCielo's two analysts are now forecasting revenues of CA$11.2m in 2020. This would be a substantial 762% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 86% to CA$0.05. Before this earnings announcement, the analysts had been modelling revenues of CA$14.5m and losses of CA$0.17 per share in 2020. We can see there's definitely been a change in sentiment in this update, with the analysts administering a meaningful downgrade to next year's revenue estimates, while at the same time reducing their loss estimates.
The consensus price target fell 29% to CA$3.50, with the dip in revenue estimates clearly souring sentiment, despite the forecast reduction in losses.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Even so, earnings are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of PharmaCielo's future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.
You should always think about risks though. Case in point, we've spotted 4 warning signs for PharmaCielo you should be aware of, and 1 of them can't be ignored.
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