Aquestive Therapeutics, Inc. (NASDAQ:AQST) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. The numbers were fairly weak, with sales of US$8.3m missing analyst predictions by 5.3%, and (statutory) losses of US$0.49 per share being slightly larger than what the analysts had expected. This is an important time for investors, as they can track a company’s performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we’ve gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the six analysts covering Aquestive Therapeutics provided consensus estimates of US$47.1m revenue in 2021, which would reflect an uneasy 14% decline on its sales over the past 12 months. Losses are expected to increase substantially, hitting US$1.76 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$53.3m and losses of US$1.68 per share in 2021. There’s been a definite change in sentiment in this update, with the analysts administering a notable cut to next year’s revenue estimates, while at the same time increasing their loss per share forecasts.
The consensus price target fell 17% to US$14.83, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. 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. The most optimistic Aquestive Therapeutics analyst has a price target of US$31.00 per share, while the most pessimistic values it at US$7.00. 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. With this in mind, we wouldn’t rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would also point out that the forecast 14% revenue decline is roughly in line with the historical trend, which saw revenues shrink 13% annually over the past three years Yet our data suggests that other companies (with analyst coverage) in the industry are expected, in aggregate, to see their revenues rise 6.7% over the coming year. So it looks like Aquestive Therapeutics’ revenues are expected to decline at a slower rate than the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Aquestive Therapeutics. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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. We have forecasts for Aquestive Therapeutics going out to 2024, and you can see them free on our platform here.
Don’t forget that there may still be risks. For instance, we’ve identified 3 warning signs for Aquestive Therapeutics (1 makes us a bit uncomfortable) 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.