Cipher Pharmaceuticals Inc. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Cipher Pharmaceuticals Inc. (TSE:CPH) shareholders are probably feeling a little disappointed, since its shares fell 8.9% to CA$13.88 in the week after its latest third-quarter results. It looks like a pretty bad result, all things considered. Although revenues of US$11m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 93% to hit US$0.01 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Cipher Pharmaceuticals

Following the latest results, Cipher Pharmaceuticals' three analysts are now forecasting revenues of US$50.1m in 2025. This would be a huge 90% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 38% to US$0.86. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$49.1m and earnings per share (EPS) of US$0.85 in 2025. There doesn't appear to have been a major change in sentiment following the results, other than the slight bump in revenue estimates.

Even though revenue forecasts increased, there was no change to the consensus price target of CA$17.37, suggesting the analysts are focused on earnings as the driver of value creation. 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. The most optimistic Cipher Pharmaceuticals analyst has a price target of CA$19.00 per share, while the most pessimistic values it at CA$14.50. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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. One thing stands out from these estimates, which is that Cipher Pharmaceuticals is forecast to grow faster in the future than it has in the past, with revenues expected to display 67% annualised growth until the end of 2025. If achieved, this would be a much better result than the 0.1% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 11% per year. So it looks like Cipher Pharmaceuticals is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Cipher Pharmaceuticals. Long-term earnings power is much more important than next year's profits. We have forecasts for Cipher Pharmaceuticals going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 3 warning signs for Cipher Pharmaceuticals (1 shouldn't be ignored!) that you need to be mindful of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.