Rockwell Medical, Inc. Just Reported A Surprise Profit And Analysts Updated Their Estimates

Shareholders will be ecstatic, with their stake up 23% over the past week following Rockwell Medical, Inc.'s (NASDAQ:RMTI) latest quarterly results. It was a solid earnings report, with revenues and earnings both coming in very strong. Revenues were 13% higher than the analysts had forecast, at US$26m, while the company also delivered a surprise statutory profit, against analyst expectations of a loss. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Rockwell Medical

Taking into account the latest results, the current consensus from Rockwell Medical's dual analysts is for revenues of US$101.5m in 2024. This would reflect an okay 7.6% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 81% to US$0.03. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$92.5m and losses of US$0.10 per share in 2024. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a very favorable reduction to loss per share in particular.

Yet despite these upgrades, the analysts cut their price target 6.3% to US$7.50, implicitly signalling that the ongoing losses are likely to weigh negatively on Rockwell Medical's valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Rockwell Medical's growth to accelerate, with the forecast 16% annualised growth to the end of 2024 ranking favourably alongside historical growth of 7.9% 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. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Rockwell Medical to grow faster 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. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Rockwell Medical's future valuation.

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 analyst estimates for Rockwell Medical going out as far as 2025, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Rockwell Medical 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.