Advertisement
Canada markets closed
  • S&P/TSX

    22,167.03
    +59.95 (+0.27%)
     
  • S&P 500

    5,254.35
    +5.86 (+0.11%)
     
  • DOW

    39,807.37
    +47.29 (+0.12%)
     
  • CAD/USD

    0.7381
    -0.0005 (-0.07%)
     
  • CRUDE OIL

    83.11
    -0.06 (-0.07%)
     
  • Bitcoin CAD

    94,946.80
    -743.79 (-0.78%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • GOLD FUTURES

    2,254.80
    +16.40 (+0.73%)
     
  • RUSSELL 2000

    2,124.55
    +10.20 (+0.48%)
     
  • 10-Yr Bond

    4.2060
    +0.0100 (+0.24%)
     
  • NASDAQ

    16,379.46
    -20.06 (-0.12%)
     
  • VOLATILITY

    13.01
    0.00 (0.00%)
     
  • FTSE

    7,952.62
    +20.64 (+0.26%)
     
  • NIKKEI 225

    40,369.44
    +201.37 (+0.50%)
     
  • CAD/EUR

    0.6845
    +0.0002 (+0.03%)
     

Heron Therapeutics, Inc. Third-Quarter Results Just Came Out: Here's What Analysts Are Forecasting For Next Year

Last week saw the newest third-quarter earnings release from Heron Therapeutics, Inc. (NASDAQ:HRTX), an important milestone in the company's journey to build a stronger business. Revenues of US$43m crushed expectations, although expenses also blew out, with the company reporting a loss per share of US$0.42, 26% bigger than analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts 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 analysts are forecasting for next year.

See our latest analysis for Heron Therapeutics

NasdaqCM:HRTX Past and Future Earnings, November 15th 2019
NasdaqCM:HRTX Past and Future Earnings, November 15th 2019

Taking into account the latest results, the current consensus from Heron Therapeutics's ten analysts is for revenues of US$166.6m in 2020, which would reflect a decent 19% increase on its sales over the past 12 months. Losses are forecast to balloon 26% to US$1.85 per share. Before this latest report, the consensus had been expecting revenues of US$167.5m and US$1.80 per share in losses. There was no real change to the revenue estimates, but analysts do seem more bullish on earnings, given the earnings per share expectations following these results.

ADVERTISEMENT

The consensus price target held steady at US$41.50, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Heron Therapeutics, with the most bullish analyst valuing it at US$75.00 and the most bearish at US$26.00 per share. With such a wide range in price targets, analysts are almost certainly baking in outcomes as diverse as total success and probable failure in the underlying business. With this in mind, we wouldn't assign too much meaning to the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

In addition, we can look to Heron Therapeutics's past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. It's pretty clear that analysts expect Heron Therapeutics's revenue growth will slow down substantially, with revenues next year expected to grow 19%, compared to a historical growth rate of 90% over the past three years. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 18% next year. So it's pretty clear that, while Heron Therapeutics's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that analysts reconfirmed their loss per share estimates for next year. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall market. The consensus price target held steady at US$41.50, with the latest estimates not enough to have an impact on analysts' estimated valuations.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Heron Therapeutics going out to 2023, and you can see them free on our platform here..

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.