Stock Analysis

Analysts Have Made A Financial Statement On Aurinia Pharmaceuticals Inc.'s (NASDAQ:AUPH) First-Quarter Report

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NasdaqGM:AUPH

As you might know, Aurinia Pharmaceuticals Inc. (NASDAQ:AUPH) just kicked off its latest quarterly results with some very strong numbers. Results overall were solid, with revenues arriving 6.9% better than analyst forecasts at US$50m. Higher revenues also resulted in substantially lower statutory losses which, at US$0.07 per share, were 6.9% smaller than the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Aurinia Pharmaceuticals

NasdaqGM:AUPH Earnings and Revenue Growth May 5th 2024

After the latest results, the seven analysts covering Aurinia Pharmaceuticals are now predicting revenues of US$227.1m in 2024. If met, this would reflect a notable 19% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Aurinia Pharmaceuticals forecast to report a statutory profit of US$0.058 per share. Before this earnings announcement, the analysts had been modelling revenues of US$223.2m and losses of US$0.055 per share in 2024. Although we saw no serious change to the revenue outlook, the analysts have definitely increased their earnings estimates, estimating a profit next year, compared to previous forecasts of a loss. So it seems like the consensus has become substantially more bullish on Aurinia Pharmaceuticals.

The consensus price target was unchanged at US$10.14, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Aurinia Pharmaceuticals at US$15.00 per share, while the most bearish prices it at US$6.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the 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. We would highlight that Aurinia Pharmaceuticals' revenue growth is expected to slow, with the forecast 26% annualised growth rate until the end of 2024 being well below the historical 58% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 18% annually. Even after the forecast slowdown in growth, it seems obvious that Aurinia Pharmaceuticals is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been a clear step-change in belief around the business' prospects, with the analysts now expecting Aurinia Pharmaceuticals to become profitable next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$10.14, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Aurinia Pharmaceuticals. Long-term earnings power is much more important than next year's profits. We have forecasts for Aurinia Pharmaceuticals going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Aurinia Pharmaceuticals that you need to be mindful 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.