Stock Analysis

New Forecasts: Here's What Analysts Think The Future Holds For MEI Pharma, Inc. (NASDAQ:MEIP)

  •  Updated
NasdaqCM:MEIP
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Celebrations may be in order for MEI Pharma, Inc. (NASDAQ:MEIP) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. Investors have been pretty optimistic on MEI Pharma too, with the stock up 22% to US$4.21 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

After the upgrade, the consensus from MEI Pharma's seven analysts is for revenues of US$18m in 2021, which would reflect a sizeable 54% decline in sales compared to the last year of performance. Per-share losses are expected to explode, reaching US$0.52 per share. However, before this estimates update, the consensus had been expecting revenues of US$13m and US$0.48 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts lifting this year's revenue estimates, while at the same time increasing their loss per share forecasts to reflect the cost of achieving this growth.

See our latest analysis for MEI Pharma

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NasdaqCM:MEIP Earnings and Revenue Growth February 11th 2021

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. We would highlight that sales are expected to reverse, with the forecast 54% revenue decline a notable change from historical growth of 98% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 21% next year. It's pretty clear that MEI Pharma's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at MEI Pharma.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for MEI Pharma going out to 2025, and you can see them free on our platform here..

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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What are the risks and opportunities for MEI Pharma?

MEI Pharma, Inc., a late-stage pharmaceutical company, focuses on the development and commercialization of various therapies for the treatment of cancer.

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Rewards

  • Trading at 96.9% below our estimate of its fair value

  • Revenue is forecast to grow 45.7% per year

Risks

  • Does not have a meaningful market cap ($41M)

  • Volatile share price over the past 3 months

  • Currently unprofitable and not forecast to become profitable over the next 3 years

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