PureTech Health plc Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

As you might know, PureTech Health plc (LON:PRTC) last week released its latest annual, and things did not turn out so great for shareholders. The analysts look to have been far too optimistic in the lead-up to these results, with revenues of (US$12m) coming in 31% below what they had expected. Statutory earnings per share of US$0.02 fell 75% short. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on PureTech Health after the latest results.

See our latest analysis for PureTech Health

Taking into account the latest results, the current consensus, from the four analysts covering PureTech Health, is for revenues of US$10.5m in 2021, which would reflect an uneasy 10% reduction in PureTech Health's sales over the past 12 months. The company is forecast to report a statutory loss of US$0.33 in 2021, a sharp decline from a profit over the last year. Before this earnings announcement, the analysts had been modelling revenues of US$10.6m and losses of US$1.67 per share in 2021. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading revenues and making a very promising decrease in losses per share in particular.

The average price target held steady at US$9.15, seeming to indicate that business is performing in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on PureTech Health, with the most bullish analyst valuing it at US$9.31 and the most bearish at US$5.10 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.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 10% by the end of 2021. This indicates a significant reduction from annual growth of 24% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 15% annually for the foreseeable future. It's pretty clear that PureTech Health's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that PureTech Health's revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$9.15, 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 PureTech Health analysts - going out to 2025, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for PureTech Health (2 are potentially serious!) that we have uncovered.

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This article by Simply Wall St is general in nature. 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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