DURECT Corporation (NASDAQ:DRRX) Consensus Forecasts Have Become A Little Darker Since Its Latest Report

A week ago, DURECT Corporation (NASDAQ:DRRX) came out with a strong set of yearly numbers that could potentially lead to a re-rate of the stock. Revenues of US$14m beat estimates by a substantial 59% margin. Unfortunately, DURECT also reported a statutory loss of US$0.16 per share, which at least was smaller than the analysts expected. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on DURECT after the latest results.

See our latest analysis for DURECT

Taking into account the latest results, the consensus forecast from DURECT's three analysts is for revenues of US$15.3m in 2022, which would reflect a meaningful 9.7% improvement in sales compared to the last 12 months. Per-share losses are supposed to see a sharp uptick, reaching US$0.19. Before this earnings announcement, the analysts had been modelling revenues of US$18.2m and losses of US$0.16 per share in 2022. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.

The consensus price target fell 5.6% to US$5.67, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the DURECT's past performance and to peers in the same industry. For example, we noticed that DURECT's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 9.7% growth to the end of 2022 on an annualised basis. That is well above its historical decline of 1.6% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 4.3% annually. So it looks like DURECT is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will 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 DURECT analysts - going out to 2024, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for DURECT that we have uncovered.

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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.