Analysts Have Lowered Expectations For Aquestive Therapeutics, Inc. (NASDAQ:AQST) After Its Latest Results

The analysts might have been a bit too bullish on Aquestive Therapeutics, Inc. (NASDAQ:AQST), given that the company fell short of expectations when it released its first-quarter results last week. Statutory earnings fell substantially short of expectations, with revenues of US$8.7m missing forecasts by 29%. Losses exploded, with a per-share loss of US$0.24 some 41% below prior forecasts. The analysts 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Following the recent earnings report, the consensus from nine analysts covering Aquestive Therapeutics is for revenues of US$45.5m in 2025. This implies an uncomfortable 16% decline in revenue compared to the last 12 months. Per-share losses are expected to explode, reaching US$0.72 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$49.6m and losses of US$0.67 per share in 2025. Overall it looks as though the analysts are negative in this update. Although revenue forecasts held steady, the consensus also made a pronounced increase to to its losses per share forecasts.

See our latest analysis for Aquestive Therapeutics

The consensus price target fell 5.6% to US$9.31, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Aquestive Therapeutics at US$15.00 per share, while the most bearish prices it at US$4.75. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 21% annualised decline to the end of 2025. That is a notable change from historical growth of 2.0% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.3% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Aquestive Therapeutics is expected to lag the wider 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 Aquestive Therapeutics. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Aquestive Therapeutics. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Aquestive Therapeutics going out to 2027, and you can see them free on our platform here..

You still need to take note of risks, for example - Aquestive Therapeutics has 2 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

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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.