Results: ACADIA Pharmaceuticals Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts

It's been a good week for ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) shareholders, because the company has just released its latest second-quarter results, and the shares gained 4.5% to US$24.60. Revenues were US$265m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$0.16 were also better than expected, beating analyst predictions by 20%. 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.

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Taking into account the latest results, the current consensus from ACADIA Pharmaceuticals' 19 analysts is for revenues of US$1.07b in 2025. This would reflect an okay 5.1% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to nosedive 59% to US$0.53 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$1.06b and earnings per share (EPS) of US$0.51 in 2025. So the consensus seems to have become somewhat more optimistic on ACADIA Pharmaceuticals' earnings potential following these results.

See our latest analysis for ACADIA Pharmaceuticals

The consensus price target was unchanged at US$29.95, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. The most optimistic ACADIA Pharmaceuticals analyst has a price target of US$40.00 per share, while the most pessimistic values it at US$17.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. It's pretty clear that there is an expectation that ACADIA Pharmaceuticals' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 10% growth on an annualised basis. This is compared to a historical growth rate of 20% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 19% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than ACADIA Pharmaceuticals.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around ACADIA Pharmaceuticals' earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for ACADIA Pharmaceuticals going out to 2027, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with ACADIA Pharmaceuticals , and understanding these should be part of your investment process.

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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.