Fennec Pharmaceuticals Inc. (NASDAQ:FENC) Analysts Are More Bearish Than They Used To Be

Today is shaping up negative for Fennec Pharmaceuticals Inc. (NASDAQ:FENC) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the downgrade, the current consensus from Fennec Pharmaceuticals' six analysts is for revenues of US$54m in 2024 which - if met - would reflect a notable 11% increase on its sales over the past 12 months. Per-share earnings are expected to jump 100% to US$0.20. Prior to this update, the analysts had been forecasting revenues of US$63m and earnings per share (EPS) of US$0.51 in 2024. Indeed, we can see that the analysts are a lot more bearish about Fennec Pharmaceuticals' prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Fennec Pharmaceuticals

The consensus price target fell 5.9% to US$15.83, with the weaker earnings outlook clearly leading analyst valuation estimates.

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. It's pretty clear that there is an expectation that Fennec Pharmaceuticals' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 24% growth on an annualised basis. This is compared to a historical growth rate of 95% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 23% annually. Factoring in the forecast slowdown in growth, it looks like Fennec Pharmaceuticals is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Fennec Pharmaceuticals. There was also a drop in their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Fennec Pharmaceuticals.

That said, the analysts might have good reason to be negative on Fennec Pharmaceuticals, given dilutive stock issuance over the past year. Learn more, and discover the 1 other flag we've identified, for free on our platform here.

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