EyePoint Pharmaceuticals, Inc. (NASDAQ:EYPT) Just Reported Second-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

As you might know, EyePoint Pharmaceuticals, Inc. (NASDAQ:EYPT) last week released its latest second-quarter, and things did not turn out so great for shareholders. Earnings fell badly short of analyst estimates, with US$9.5m revenue falling -11% short, and statutory losses of US$0.58 per share being -19% greater than forecast. 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.

Check out our latest analysis for EyePoint Pharmaceuticals

Taking into account the latest results, the eleven analysts covering EyePoint Pharmaceuticals provided consensus estimates of US$42.2m revenue in 2024, which would reflect an uncomfortable 16% decline over the past 12 months. Losses are forecast to balloon 46% to US$2.44 per share. Before this earnings announcement, the analysts had been modelling revenues of US$43.7m and losses of US$2.29 per share in 2024. So it's pretty clear consensus is more negative on EyePoint Pharmaceuticals after the new consensus numbers; while the analysts trimmed their revenue estimates, they also administered a moderate increase in per-share loss expectations.

The average price target was broadly unchanged at US$39.10, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on EyePoint Pharmaceuticals, with the most bullish analyst valuing it at US$68.00 and the most bearish at US$28.00 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. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 30% by the end of 2024. This indicates a significant reduction from annual growth of 18% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 9.4% annually for the foreseeable future. It's pretty clear that EyePoint Pharmaceuticals' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at EyePoint Pharmaceuticals. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse 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.

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 EyePoint Pharmaceuticals analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - EyePoint Pharmaceuticals has 4 warning signs we think you should be aware 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.