Microbix Biosystems Inc. (TSE:MBX) Just Reported Earnings, And Analysts Cut Their Target Price

It's been a good week for Microbix Biosystems Inc. (TSE:MBX) shareholders, because the company has just released its latest first-quarter results, and the shares gained 3.8% to CA$0.41. Revenues beat expectations, coming in 2.3% ahead of forecasts, and the company broke even on a statutory earnings per share (EPS) level. Following the result, the analyst has 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analyst has changed their mind on Microbix Biosystems after the latest results.

View our latest analysis for Microbix Biosystems

Taking into account the latest results, the current consensus from Microbix Biosystems' solitary analyst is for revenues of CA$25.0m in 2024. This would reflect a notable 12% increase on its revenue over the past 12 months. Statutory earnings per share are expected to dive 26% to CA$0.02 in the same period. Before this earnings report, the analyst had been forecasting revenues of CA$25.4m and earnings per share (EPS) of CA$0.03 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.

The average price target fell 20% to CA$0.80, with reduced earnings forecasts clearly tied to a lower valuation estimate.

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. The analyst is definitely expecting Microbix Biosystems' growth to accelerate, with the forecast 16% annualised growth to the end of 2024 ranking favourably alongside historical growth of 11% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 59% annually. So it's clear that despite the acceleration in growth, Microbix Biosystems is expected to grow meaningfully slower than the industry average.

The Bottom Line

The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Microbix Biosystems. Fortunately, the analyst also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Microbix Biosystems' revenue is expected to perform worse than the wider industry. 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.

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. At least one analyst has provided forecasts out to 2026, which can be seen for 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 Microbix Biosystems (1 is significant!) 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.