Biofrontera AG (ETR:B8F) Consensus Forecasts Have Become A Little Darker Since Its Latest Report

Last week, you might have seen that Biofrontera AG (ETR:B8F) released its yearly result to the market. The early response was not positive, with shares down 6.3% to €2.38 in the past week. It was an okay result overall, with revenues coming in at €30m, roughly what the analysts had been expecting. The analysts 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Biofrontera after the latest results.

Check out our latest analysis for Biofrontera

After the latest results, the three analysts covering Biofrontera are now predicting revenues of €31.7m in 2021. If met, this would reflect a credible 4.5% improvement in sales compared to the last 12 months. Losses are forecast to balloon 21% to €0.29 per share. Before this earnings announcement, the analysts had been modelling revenues of €34.6m and losses of €0.28 per share in 2021. Overall it looks as though the analysts are negative in this update. Although sales forecasts held steady, the consensus also made a moderate increase in to its losses per share forecasts.

The analysts lifted their price target 61% to €10.33, implicitly signalling that lower earnings per share are not expected to have a longer-term impact on the stock's value. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Biofrontera, with the most bullish analyst valuing it at €13.00 and the most bearish at €7.65 per share. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Biofrontera's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Biofrontera's revenue growth will slow down substantially, with revenues to the end of 2021 expected to display 4.5% growth on an annualised basis. This is compared to a historical growth rate of 39% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 26% 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 Biofrontera.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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. We have forecasts for Biofrontera going out to 2025, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Biofrontera that you should be aware of.

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