ADMA Biologics, Inc. (NASDAQ:ADMA) just released its latest third-quarter results and things are looking bullish. ADMA Biologics beat expectations with revenues of US$10m arriving 2.8% ahead of forecasts. The company also reported a statutory loss of US$0.19, 4.0% smaller than was expected. 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. Readers will be glad to know we’ve aggregated the latest statutory forecasts to see whether the analysts have changed their mind on ADMA Biologics after the latest results.
After the latest results, the five analysts covering ADMA Biologics are now predicting revenues of US$71.9m in 2021. If met, this would reflect a major 93% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 37% to US$0.56. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$79.4m and losses of US$0.43 per share in 2021. So it’s pretty clear the analysts have mixed opinions on ADMA Biologics after this update; revenues were downgraded and per-share losses expected to increase.
The consensus price target fell 16% to US$7.80, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. 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. There are some variant perceptions on ADMA Biologics, with the most bullish analyst valuing it at US$12.00 and the most bearish at US$4.00 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting ADMA Biologics’ growth to accelerate, with the forecast 93% growth ranking favourably alongside historical growth of 32% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 20% next year. Factoring in the forecast acceleration in revenue, it’s pretty clear that ADMA Biologics is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. They also downgraded their revenue estimates, although industry data suggests that ADMA Biologics’ revenues are expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
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 ADMA Biologics going out to 2024, and you can see them free on our platform here..
You should always think about risks though. Case in point, we’ve spotted 3 warning signs for ADMA Biologics you should be aware of, and 1 of them is a bit unpleasant.
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.