Inovio Pharmaceuticals, Inc. (NASDAQ:INO) Just Reported And Analysts Have Been Cutting Their Estimates

Inovio Pharmaceuticals, Inc. (NASDAQ:INO) missed earnings with its latest first-quarter results, disappointing overly-optimistic forecasters. Earnings missed the mark badly, with revenues of US$115k falling 58% short of expectations. Losses correspondingly increased, with a US$0.16 per-share statutory loss some 10% larger than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Inovio Pharmaceuticals

Following the recent earnings report, the consensus from three analysts covering Inovio Pharmaceuticals is for revenues of US$455.0k in 2023, implying a stressful 96% decline in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 37% to US$0.58. Before this latest report, the consensus had been expecting revenues of US$1.10m and US$0.53 per share in losses. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.

The average price target fell 40% to US$1.40, implicitly signalling that lower earnings per share are a leading indicator for Inovio Pharmaceuticals' valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Inovio Pharmaceuticals analyst has a price target of US$2.00 per share, while the most pessimistic values it at US$1.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One more thing stood out to us about these estimates, and it's the idea that Inovio Pharmaceuticals' decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 98% to the end of 2023. This tops off a historical decline of 45% a year over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 19% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Inovio Pharmaceuticals to suffer worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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

You should always think about risks though. Case in point, we've spotted 3 warning signs for Inovio Pharmaceuticals 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.