Earnings Update: Celon Pharma S.A. (WSE:CLN) Just Reported And Analysts Are Boosting Their Estimates

It's been a good week for Celon Pharma S.A. (WSE:CLN) shareholders, because the company has just released its latest quarterly results, and the shares gained 7.2% to zł15.86. Revenues came in at zł69m, an impressive 29% ahead of analyst forecasts. Following the result, the analysts have 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Celon Pharma

Taking into account the latest results, the current consensus, from the twin analysts covering Celon Pharma, is for revenues of zł204.8m in 2023. This implies a measurable 2.9% reduction in Celon Pharma's revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 56% to zł0.26. Before this latest report, the consensus had been expecting revenues of zł186.0m and zł0.83 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

The consensus price target fell 13%, to zł15.50, suggesting that the analysts remain pessimistic on the company, despite the improved earnings and revenue outlook.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 5.8% annualised decline to the end of 2023. That is a notable change from historical growth of 15% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.1% per year. It's pretty clear that Celon Pharma'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. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2025, 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 1 warning sign for Celon Pharma 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.