Cipher Pharmaceuticals Inc. (TSE:CPH) Analysts Are Pretty Bullish On The Stock After Recent Results

Cipher Pharmaceuticals Inc. (TSE:CPH) shareholders are probably feeling a little disappointed, since its shares fell 8.9% to CA$13.48 in the week after its latest third-quarter results. Results look mixed - while revenue fell marginally short of analyst estimates at US$13m, statutory earnings were in line with expectations, at US$0.21 per share. 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.

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Taking into account the latest results, the consensus forecast from Cipher Pharmaceuticals' three analysts is for revenues of US$55.6m in 2026. This reflects a meaningful 11% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to fall 13% to US$0.60 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$56.1m and earnings per share (EPS) of US$0.64 in 2026. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

See our latest analysis for Cipher Pharmaceuticals

Despite cutting their earnings forecasts,the analysts have lifted their price target 13% to CA$17.90, suggesting that these impacts are not expected to weigh on the stock's value in the long term. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Cipher Pharmaceuticals analyst has a price target of CA$20.00 per share, while the most pessimistic values it at CA$14.00. 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Cipher Pharmaceuticals' revenue growth is expected to slow, with the forecast 8.8% annualised growth rate until the end of 2026 being well below the historical 16% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Cipher Pharmaceuticals.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Cipher Pharmaceuticals' revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Cipher Pharmaceuticals going out to 2027, 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 2 warning signs for Cipher Pharmaceuticals 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.