Liquidia Corporation (NASDAQ:LQDA) Just Reported And Analysts Have Been Lifting Their Price Targets

Simply Wall St
May 15, 2022
Source: Shutterstock

Shareholders might have noticed that Liquidia Corporation (NASDAQ:LQDA) filed its quarterly result this time last week. The early response was not positive, with shares down 6.0% to US$5.31 in the past week. The results don't look great, especially considering that statutory losses grew 45% toUS$0.30 per share. Revenues of US$3.5m did beat expectations by 4.5%, but it looks like a bit of a cold comfort. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Liquidia

NasdaqCM:LQDA Earnings and Revenue Growth May 15th 2022

Taking into account the latest results, the most recent consensus for Liquidia from four analysts is for revenues of US$17.9m in 2022 which, if met, would be a huge 35% increase on its sales over the past 12 months. Per-share losses are expected to explode, reaching US$0.92 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$17.0m and losses of US$0.84 per share in 2022. Overall it looks as though the analysts were a bit mixed on the latest consensus updates. Although there was a nice uplift to revenue, the consensus also made a pronounced increase to its losses per share forecasts.

The average price target rose 15% to US$11.75, even thoughthe analysts have been updating their forecasts to show higher revenues and higher forecast losses. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Liquidia, with the most bullish analyst valuing it at US$16.00 and the most bearish at US$6.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the 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. The analysts are definitely expecting Liquidia's growth to accelerate, with the forecast 49% annualised growth to the end of 2022 ranking favourably alongside historical growth of 29% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.0% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Liquidia is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Liquidia analysts - going out to 2024, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Liquidia that you should be aware of.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.