Enanta Pharmaceuticals, Inc. (NASDAQ:ENTA) Consensus Forecasts Have Become A Little Darker Since Its Latest Report

Enanta Pharmaceuticals, Inc. (NASDAQ:ENTA) just released its latest quarterly report and things are not looking great. It definitely looks like a negative result overall with revenues falling 18% short of analyst estimates at US$18m. Statutory losses were US$1.58 per share, 29% bigger than what 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Enanta Pharmaceuticals

Taking into account the latest results, the current consensus, from the eight analysts covering Enanta Pharmaceuticals, is for revenues of US$68.8m in 2024. This implies a perceptible 6.5% reduction in Enanta Pharmaceuticals' revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 21% to US$5.17. Before this latest report, the consensus had been expecting revenues of US$72.5m and US$4.86 per share in losses. So it's pretty clear consensus is more negative on Enanta Pharmaceuticals after the new consensus numbers; while the analysts trimmed their revenue estimates, they also administered a modest increase to per-share loss expectations.

The average price target fell 13% to US$20.88, implicitly signalling that lower earnings per share are a leading indicator for Enanta Pharmaceuticals' valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Enanta Pharmaceuticals, with the most bullish analyst valuing it at US$35.00 and the most bearish at US$11.00 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. 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.

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. We would also point out that the forecast 8.6% annualised revenue decline to the end of 2024 is better than the historical trend, which saw revenues shrink 26% annually over the past five years Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 17% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Enanta Pharmaceuticals to suffer worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Enanta 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 2 warning signs for Enanta 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.