Infinity Pharmaceuticals, Inc. (NASDAQ:INFI) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's statutory forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance. The market may be pricing in some blue sky too, with the share price gaining 52% to US$1.72 in the last 7 days. Could this upgrade be enough to drive the stock even higher?
After this upgrade, Infinity Pharmaceuticals' four analysts are now forecasting revenues of US$2.7m in 2021. This would be a sizeable 69% improvement in sales compared to the last 12 months. Losses are expected to be contained, narrowing 19% from last year to US$0.57. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$1.7m and losses of US$0.74 per share in 2021. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to next year's revenue estimates, while at the same time reducing their loss estimates.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. One thing stands out from these estimates, which is that Infinity Pharmaceuticals is forecast to grow faster in the future than it has in the past, with revenues expected to grow 69%. If achieved, this would be a much better result than the 64% annual decline over the past five years. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 21% next year. So it looks like Infinity Pharmaceuticals is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing here is that analysts reduced their loss per share estimates for next year, reflecting increased optimism around Infinity Pharmaceuticals' prospects. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. The clear improvement in sentiment should be enough to get most shareholders feeling more optimistic about Infinity Pharmaceuticals' future.
These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 6 potential concerns with Infinity Pharmaceuticals, including a short cash runway. For more information, you can click through to our platform to learn more about this and the 4 other concerns 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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