Earnings Miss: Clinuvel Pharmaceuticals Limited Missed EPS By 41% And Analysts Are Revising Their Forecasts

The analysts might have been a bit too bullish on Clinuvel Pharmaceuticals Limited (ASX:CUV), given that the company fell short of expectations when it released its half-yearly results last week. The analysts look to have been far too optimistic in the lead-up to these results, with revenues of (AU$14m) coming in 33% below what they had expected. Statutory earnings per share of AU$0.13 fell 41% short. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Clinuvel Pharmaceuticals

Taking into account the latest results, the current consensus from Clinuvel Pharmaceuticals' two analysts is for revenues of AU$45.0m in 2021, which would reflect a meaningful 17% increase on its sales over the past 12 months. Statutory earnings per share are forecast to crater 23% to AU$0.35 in the same period. Before this earnings report, the analysts had been forecasting revenues of AU$45.9m and earnings per share (EPS) of AU$0.26 in 2021. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the massive increase in earnings per share expectations following these results.

There's been no major changes to the consensus price target of AU$28.39, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Clinuvel Pharmaceuticals' past performance and to peers in the same industry. We would highlight that Clinuvel Pharmaceuticals' revenue growth is expected to slow, with forecast 17% increase next year well below the historical 31%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) 12% next year. Even after the forecast slowdown in growth, it seems obvious that Clinuvel Pharmaceuticals is also expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Clinuvel Pharmaceuticals' earnings potential 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 held steady at AU$28.39, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.

Before you take the next step you should know about the 1 warning sign for Clinuvel Pharmaceuticals that we have uncovered.

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