Stock Analysis

PolyPeptide Group AG Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

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There's been a major selloff in PolyPeptide Group AG (VTX:PPGN) shares in the week since it released its yearly report, with the stock down 21% to CHF18.78. Statutory earnings per share fell badly short of expectations, coming in at €0.24, some 41% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at €283m. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for PolyPeptide Group

SWX:PPGN Earnings and Revenue Growth March 18th 2023

Taking into account the latest results, the current consensus from PolyPeptide Group's four analysts is for revenues of €309.8m in 2023, which would reflect a solid 9.3% increase on its sales over the past 12 months. Statutory earnings per share are predicted to shoot up 159% to €0.61. Before this earnings report, the analysts had been forecasting revenues of €312.6m and earnings per share (EPS) of €0.93 in 2023. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.

The consensus price target held steady at CHF27.59, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on PolyPeptide Group, with the most bullish analyst valuing it at CHF32.86 and the most bearish at CHF21.28 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the PolyPeptide Group's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of PolyPeptide Group'shistorical trends, as the 9.3% annualised revenue growth to the end of 2023 is roughly in line with the 11% annual revenue growth over the past three years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 11% per year. It's clear that while PolyPeptide Group's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

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. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at CHF27.59, 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. We have estimates - from multiple PolyPeptide Group analysts - going out to 2025, and you can see them free on our platform here.

Even so, be aware that PolyPeptide Group is showing 3 warning signs in our investment analysis , and 1 of those is a bit concerning...

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