Nephros, Inc. (NASDAQ:NEPH) Just Reported And Analysts Have Been Cutting Their Estimates

Shareholders might have noticed that Nephros, Inc. (NASDAQ:NEPH) filed its quarterly result this time last week. The early response was not positive, with shares down 4.1% to US$2.10 in the past week. Revenues of US$3.5m came in a modest 5.7% below forecasts. Statutory losses were a relative bright spot though, with a per-share loss of US$0.02 coming in a substantial 50% smaller than what the analyst had expected. The analyst 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. With this in mind, we've gathered the latest statutory forecasts to see what the analyst is expecting for next year.

See our latest analysis for Nephros

Following the latest results, Nephros' lone analyst are now forecasting revenues of US$15.7m in 2024. This would be a solid 12% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 63% to US$0.05. Yet prior to the latest earnings, the analyst had been forecasting revenues of US$16.7m and losses of US$0.04 per share in 2024. So it's pretty clear the analyst has mixed opinions on Nephros after this update; revenues were downgraded and per-share losses expected to increase.

The analyst lifted their price target 58% to US$4.75, implicitly signalling that lower earnings per share are not expected to have a longer-term impact on the stock's value.

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. The analyst is definitely expecting Nephros' growth to accelerate, with the forecast 16% annualised growth to the end of 2024 ranking favourably alongside historical growth of 10% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.5% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Nephros is expected to grow much faster than its industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Nephros. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analyst believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Nephros. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.

You still need to take note of risks, for example - Nephros has 2 warning signs we think you should be aware 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.