Pharma Mar, S.A. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Last week, you might have seen that Pharma Mar, S.A. (BME:PHM) released its annual result to the market. The early response was not positive, with shares down 5.3% to €30.66 in the past week. It looks like a pretty bad result, all things considered. Although revenues of €158m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 59% to hit €0.06 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Pharma Mar

After the latest results, the four analysts covering Pharma Mar are now predicting revenues of €170.5m in 2024. If met, this would reflect a credible 7.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 1,212% to €0.83. Before this earnings report, the analysts had been forecasting revenues of €174.7m and earnings per share (EPS) of €1.01 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

Despite the cuts to forecast earnings, there was no real change to the €49.40 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic 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 Pharma Mar, with the most bullish analyst valuing it at €70.00 and the most bearish at €30.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Pharma Mar'shistorical trends, as the 7.8% annualised revenue growth to the end of 2024 is roughly in line with the 7.2% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 20% per year. So although Pharma Mar is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Pharma Mar. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Pharma Mar. Long-term earnings power is much more important than next year's profits. We have forecasts for Pharma Mar going out to 2026, and you can see them free on our platform here.

Even so, be aware that Pharma Mar is showing 3 warning signs in our investment analysis , and 1 of those is potentially serious...

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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.