Forecast: Analysts Think Marinus Pharmaceuticals, Inc.'s (NASDAQ:MRNS) Business Prospects Have Improved Drastically

Shareholders in Marinus Pharmaceuticals, Inc. (NASDAQ:MRNS) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

After this upgrade, Marinus Pharmaceuticals' eleven analysts are now forecasting revenues of US$29m in 2023. This would be a substantial 34% improvement in sales compared to the last 12 months. Per-share losses are expected to explode, reaching US$2.87 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$26m and losses of US$3.21 per share in 2023. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

View our latest analysis for Marinus Pharmaceuticals

There was no major change to the consensus price target of US$23.60, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Marinus Pharmaceuticals at US$42.00 per share, while the most bearish prices it at US$14.00. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how think this business will perform. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Marinus Pharmaceuticals' revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 47% growth on an annualised basis. This is compared to a historical growth rate of 75% 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) 7.1% per year. So it's pretty clear that, while Marinus Pharmaceuticals' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Marinus Pharmaceuticals is moving incrementally towards profitability. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Marinus Pharmaceuticals could be a good candidate for more research.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Marinus Pharmaceuticals analysts - 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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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.