Shareholders of Amicus Therapeutics, Inc. (NASDAQ:FOLD) will be pleased this week, given that the stock price is up 15% to US$20.47 following its latest quarterly results. The results don’t look great, especially considering that statutory losses grew 19% toUS$0.25 per share. Revenues of US$67,437,000 did beat expectations by 3.9%, but it looks like a bit of a cold comfort. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the consensus forecast from Amicus Therapeutics’ nine analysts is for revenues of US$336.1m in 2021, which would reflect a sizeable 37% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 35% to US$0.74. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$347.4m and losses of US$0.66 per share in 2021. So it’s pretty clear the analysts have mixed opinions on Amicus Therapeutics after this update; revenues were downgraded and per-share losses expected to increase.
The average price target lifted 16% to US$23.30, clearly signalling that the weaker revenue and EPS outlook are not expected to weigh on the stock over the longer term. 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 Amicus Therapeutics, with the most bullish analyst valuing it at US$31.00 and the most bearish at US$19.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Amicus Therapeutics’ revenue growth is expected to slow, with forecast 37% increase next year well below the historical 61%p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 20% next year. So it’s pretty clear that, while Amicus Therapeutics’ revenue growth is expected to slow, it’s still expected to grow faster than the industry itself.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
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 estimates – from multiple Amicus Therapeutics analysts – going out to 2024, and you can see them free on our platform here.
Plus, you should also learn about the 3 warning signs we’ve spotted with Amicus Therapeutics .
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.