Microbix Biosystems Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

It's been a good week for Microbix Biosystems Inc. (TSE:MBX) shareholders, because the company has just released its latest third-quarter results, and the shares gained 8.6% to CA$0.63. The results were mixed; although revenues of CA$5.4m fell 12% short of what the analyst had predicted, per-share (statutory) earnings of CA$0.011 beat expectations by 57%. The analyst typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimate suggests is in store for next year.

View our latest analysis for Microbix Biosystems

Taking into account the latest results, the most recent consensus for Microbix Biosystems from single analyst is for revenues of CA$28.1m in 2022 which, if met, would be a substantial 79% increase on its sales over the past 12 months. Microbix Biosystems is also expected to turn profitable, with statutory earnings of CA$0.048 per share. Before this earnings report, the analyst had been forecasting revenues of CA$36.6m and earnings per share (EPS) of CA$0.074 in 2022. Indeed, we can see that the analyst is a lot more bearish about Microbix Biosystems' prospects following the latest results, administering a large cut to revenue estimates and slashing their EPS estimates to boot.

It'll come as no surprise then, to learn that the analyst has cut their price target 5.6% to CA$1.70.

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. It's clear from the latest estimates that Microbix Biosystems' rate of growth is expected to accelerate meaningfully, with the forecast 59% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 6.5% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 67% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Microbix Biosystems is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Sadly, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of Microbix Biosystems' future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Microbix Biosystems that you should be aware 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.
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