The analysts might have been a bit too bullish on Dicerna Pharmaceuticals, Inc. (NASDAQ:DRNA), given that the company fell short of expectations when it released its quarterly results last week. Revenues missed expectations somewhat, coming in at US$49m and leading to a corresponding blowout in statutory losses. The loss per share was US$0.29, some 19% larger than the analysts forecast. 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.
Following the latest results, Dicerna Pharmaceuticals' eight analysts are now forecasting revenues of US$236.0m in 2021. This would be a major 163% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 63% to US$0.64. Before this latest report, the consensus had been expecting revenues of US$208.5m and US$0.74 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.
There was no major change to the consensus price target of US$35.22, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook. 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. There are some variant perceptions on Dicerna Pharmaceuticals, with the most bullish analyst valuing it at US$48.00 and the most bearish at US$25.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Dicerna Pharmaceuticals' rate of growth is expected to accelerate meaningfully, with the forecast 163% revenue growth noticeably faster than its historical growth of 88%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 20% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Dicerna Pharmaceuticals is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster 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 Dicerna Pharmaceuticals going out to 2024, and you can see them free on our platform here..
It is also worth noting that we have found 3 warning signs for Dicerna Pharmaceuticals (1 is a bit concerning!) that you need to take into consideration.
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