Delcath Systems, Inc. (NASDAQ:DCTH) Reported Earnings Last Week And Analysts Are Already Upgrading Their Estimates

Shareholders might have noticed that Delcath Systems, Inc. (NASDAQ:DCTH) filed its quarterly result this time last week. The early response was not positive, with shares down 8.2% to US$7.91 in the past week. Revenues came in 43% better than analyst models expected, at US$7.8m, although statutory losses ballooned 36% to US$0.48, which is much worse than what was forecast. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Delcath Systems after the latest results.

View our latest analysis for Delcath Systems

Following the latest results, Delcath Systems' six analysts are now forecasting revenues of US$32.8m in 2024. This would be a substantial 176% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 42% to US$1.17. Before this latest report, the consensus had been expecting revenues of US$29.1m and US$1.25 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.

There was no major change to the consensus price target of US$21.33, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Delcath Systems analyst has a price target of US$25.00 per share, while the most pessimistic values it at US$18.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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 analysts are definitely expecting Delcath Systems' growth to accelerate, with the forecast 7x annualised growth to the end of 2024 ranking favourably alongside historical growth of 27% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.2% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Delcath Systems is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. 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.

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 estimates - from multiple Delcath Systems analysts - going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 3 warning signs for Delcath Systems (1 doesn't sit too well with us!) that you need to take into consideration.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com