Esperion Therapeutics, Inc. (NASDAQ:ESPR) Analysts Are Reducing Their Forecasts For This Year

The analysts covering Esperion Therapeutics, Inc. (NASDAQ:ESPR) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the downgrade, the consensus from twelve analysts covering Esperion Therapeutics is for revenues of US$91m in 2021, implying a substantial 61% decline in sales compared to the last 12 months. Per-share losses are expected to explode, reaching US$10.67 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$110m and losses of US$9.64 per share in 2021. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

See our latest analysis for Esperion Therapeutics

The consensus price target fell 25% to US$47.33, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Esperion Therapeutics, with the most bullish analyst valuing it at US$134 and the most bearish at US$18.00 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 72% by the end of 2021. This indicates a significant reduction from annual growth of 4,784% over the last year. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 14% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Esperion Therapeutics is expected to lag the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Esperion Therapeutics. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Esperion Therapeutics' revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Esperion Therapeutics.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Esperion Therapeutics' financials, such as a short cash runway. For more information, you can click here to discover this and the 2 other risks we've identified.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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