Results: Eton Pharmaceuticals, Inc. Delivered A Surprise Loss And Now Analysts Have New Forecasts

It's been a pretty great week for Eton Pharmaceuticals, Inc. (NASDAQ:ETON) shareholders, with its shares surging 14% to US$19.70 in the week since its latest first-quarter results. Revenues came in well ahead of expectations at US$17m, although statutory earnings per share fell badly short. Eton Pharmaceuticals reported a loss of US$0.06 per share, whereas the analysts had previously expected a profit. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

After the latest results, the three analysts covering Eton Pharmaceuticals are now predicting revenues of US$77.2m in 2025. If met, this would reflect a major 60% improvement in revenue compared to the last 12 months. Eton Pharmaceuticals is also expected to turn profitable, with statutory earnings of US$0.25 per share. In the lead-up to this report, the analysts had been modelling revenues of US$73.6m and earnings per share (EPS) of US$0.47 in 2025. While next year's revenue estimates increased, there was also a large cut to EPS expectations, suggesting the consensus has a bit of a mixed view of these results.

See our latest analysis for Eton Pharmaceuticals

There's been no major changes to the price target of US$29.00, suggesting that the impact of higher forecast revenue and lower earnings won't result in a meaningful change to the business' 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. The most optimistic Eton Pharmaceuticals analyst has a price target of US$33.00 per share, while the most pessimistic values it at US$26.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Eton Pharmaceuticals' growth to accelerate, with the forecast 87% annualised growth to the end of 2025 ranking favourably alongside historical growth of 41% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 8.3% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Eton Pharmaceuticals to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Eton Pharmaceuticals. Happily, they also upgraded their revenue estimates, and are forecasting them 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Eton Pharmaceuticals going out to 2027, and you can see them free on our platform here..

You can also view our analysis of Eton Pharmaceuticals' balance sheet, and whether we think Eton Pharmaceuticals is carrying too much debt, for free on our platform here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.