Global Blood Therapeutics, Inc. (NASDAQ:GBT) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. Unfortunately, Global Blood Therapeutics delivered a serious earnings miss. Revenues of US$37m were 16% below expectations, and statutory losses ballooned 33% to US$0.97 per share. 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.
After the latest results, the 18 analysts covering Global Blood Therapeutics are now predicting revenues of US$286.0m in 2021. If met, this would reflect a substantial 499% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 69% to US$1.45. Before this earnings announcement, the analysts had been modelling revenues of US$335.5m and losses of US$1.16 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 14% to US$92.20, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. That’s not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Global Blood Therapeutics at US$152 per share, while the most bearish prices it at US$45.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. 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.
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 Global Blood Therapeutics’ 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year’s earnings. We have forecasts for Global Blood 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 Global Blood Therapeutics that 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.