Analysts Have Been Trimming Their Enanta Pharmaceuticals, Inc. (NASDAQ:ENTA) Price Target After Its Latest Report

The analysts might have been a bit too bullish on Enanta Pharmaceuticals, Inc. (NASDAQ:ENTA), given that the company fell short of expectations when it released its yearly results last week. Enanta Pharmaceuticals missed analyst estimates, with revenues of US$68m and a statutory loss per share (eps) of US$5.48 falling 5.0% and 4.4% below expectations, respectively. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Enanta Pharmaceuticals

Taking into account the latest results, the current consensus from Enanta Pharmaceuticals' eight analysts is for revenues of US$72.5m in 2025. This would reflect a reasonable 7.2% increase on its revenue over the past 12 months. Losses are forecast to narrow 7.7% to US$5.05 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$73.5m and losses of US$4.95 per share in 2025. So it's pretty clear consensus is mixed on Enanta Pharmaceuticals after the new consensus numbers; while the analysts held their revenue numbers steady, they also administered a modest increase to per-share loss expectations.

With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 7.6% to US$18.13, with the analysts signalling that growing losses would be a definite concern. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Enanta Pharmaceuticals analyst has a price target of US$30.00 per share, while the most pessimistic values it at US$9.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Enanta Pharmaceuticals' past performance and to peers in the same industry. One thing stands out from these estimates, which is that Enanta Pharmaceuticals is forecast to grow faster in the future than it has in the past, with revenues expected to display 7.2% annualised growth until the end of 2025. If achieved, this would be a much better result than the 21% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 22% per year. So although Enanta Pharmaceuticals' revenue growth is expected to improve, it is still expected to grow slower than the industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Enanta Pharmaceuticals' revenue is expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Enanta Pharmaceuticals' future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Enanta Pharmaceuticals going out to 2027, 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 2 warning signs for Enanta Pharmaceuticals (1 is potentially serious!) 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.