Earnings Update: Fennec Pharmaceuticals Inc. (NASDAQ:FENC) Just Reported And Analysts Are Boosting Their Estimates

Fennec Pharmaceuticals Inc. (NASDAQ:FENC) investors will be delighted, with the company turning in some strong numbers with its latest results. Revenue crushed expectations at US$6.5m, beating expectations by 22%. Fennec Pharmaceuticals reported a statutory loss of US$0.07 per share, which - although not amazing - was much smaller than the analysts predicted. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Fennec Pharmaceuticals

Following the latest results, Fennec Pharmaceuticals' six analysts are now forecasting revenues of US$44.0m in 2024. This would be a major 237% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Fennec Pharmaceuticals forecast to report a statutory profit of US$0.23 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$41.4m and earnings per share (EPS) of US$0.13 in 2024. So it seems there's been a definite increase in optimism about Fennec Pharmaceuticals' future following the latest results, with a sizeable expansion in the earnings per share forecasts in particular.

Despite these upgrades,the analysts have not made any major changes to their price target of US$16.40, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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 Fennec Pharmaceuticals, with the most bullish analyst valuing it at US$17.00 and the most bearish at US$16.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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. The analysts are definitely expecting Fennec Pharmaceuticals' growth to accelerate, with the forecast 164% annualised growth to the end of 2024 ranking favourably alongside historical growth of 99% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 15% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Fennec Pharmaceuticals is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Fennec Pharmaceuticals' earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Fennec Pharmaceuticals. Long-term earnings power is much more important than next year's profits. We have forecasts for Fennec Pharmaceuticals going out to 2025, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 3 warning signs for Fennec Pharmaceuticals (of which 1 is a bit concerning!) you should know about.

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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.