Yahoo Finance US$5.50: That's What Analysts Think Recro Pharma, Inc. (NASDAQ:REPH) Is Worth After Its Latest Results
Recro Pharma, Inc. (NASDAQ:REPH) investors will be delighted, with the company turning in some strong numbers with its latest results. It looks like a positive result overall, with revenues of US$17m beating forecasts by 2.3%. Statutory losses of US$0.23 per share were 2.3% smaller than the analysts expected, likely helped along by the higher revenues. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Recro Pharma after the latest results.
Check out our latest analysis for Recro Pharma
Taking into account the latest results, the most recent consensus for Recro Pharma from twin analysts is for revenues of US$69.9m in 2021 which, if met, would be a meaningful 14% increase on its sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 50% to US$0.52. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$71.0m and losses of US$0.63 per share in 2021. Although the revenue estimates have not really changed Recro Pharma'sfuture looks a little different to the past, with a favorable reduction in the loss per share forecasts in particular.
The consensus price target fell 19% to US$5.50despite the forecast for smaller losses next year. It looks like the ongoing lack of profitability is starting to weigh on valuations.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Recro Pharma's rate of growth is expected to accelerate meaningfully, with the forecast 19% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 3.5% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.1% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Recro Pharma is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Recro Pharma's future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Recro Pharma going out as far as 2025, and you can see them free on our platform here.
Before you take the next step you should know about the 5 warning signs for Recro Pharma (1 makes us a bit uncomfortable!) that we have uncovered.
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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