US$12.00: That's What Analysts Think Journey Medical Corporation (NASDAQ:DERM) Is Worth After Its Latest Results

By
Simply Wall St
Published
May 12, 2022
NasdaqCM:DERM
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Journey Medical Corporation (NASDAQ:DERM) investors will be delighted, with the company turning in some strong numbers with its latest results. Revenues and losses per share were both better than expected, with revenues of US$23m leading estimates by 4.5%. Statutory losses were smaller than the analystsexpected, coming in at US$0.08 per share. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Journey Medical

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NasdaqCM:DERM Earnings and Revenue Growth May 12th 2022

Taking into account the latest results, the consensus forecast from Journey Medical's three analysts is for revenues of US$102.1m in 2022, which would reflect a substantial 62% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 51% to US$1.23. Before this earnings announcement, the analysts had been modelling revenues of US$102.1m and losses of US$1.23 per share in 2022.

As a result, it's unexpected to see that the consensus price target fell 7.7% to US$12.00, with the analysts seemingly becoming more concerned about ongoing losses, despite making no major changes to their forecasts. 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. Currently, the most bullish analyst values Journey Medical at US$17.00 per share, while the most bearish prices it at US$9.00. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Journey Medical's growth to accelerate, with the forecast 90% annualised growth to the end of 2022 ranking favourably alongside historical growth of 42% per annum over the past year. Compare this with other companies in the same industry, which are forecast to grow their revenue 2.9% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Journey 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, there were no major changes to revenue forecasts, with the business still expected to grow faster 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Journey Medical analysts - going out to 2024, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Journey Medical you should be aware of.

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