Stock Analysis

Earnings Update: Ocular Therapeutix, Inc. (NASDAQ:OCUL) Just Reported Its Second-Quarter Results And Analysts Are Updating Their Forecasts

NasdaqGM:OCUL
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It's been a good week for Ocular Therapeutix, Inc. (NASDAQ:OCUL) shareholders, because the company has just released its latest second-quarter results, and the shares gained 7.2% to US$8.34. Revenue of US$16m came in 3.8% ahead of expectations, although statutory earnings didn't fare nearly so well, recording a loss of US$0.26, a 18% miss. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Ocular Therapeutix after the latest results.

View our latest analysis for Ocular Therapeutix

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NasdaqGM:OCUL Earnings and Revenue Growth August 10th 2024

Taking into account the latest results, the consensus forecast from Ocular Therapeutix's eight analysts is for revenues of US$66.2m in 2024. This reflects a decent 8.3% improvement in revenue compared to the last 12 months. Per-share losses are expected to explode, reaching US$1.18 per share. Before this earnings announcement, the analysts had been modelling revenues of US$66.2m and losses of US$1.14 per share in 2024. So it's pretty clear consensus is mixed on Ocular Therapeutix after the new consensus numbers; while the analysts held their revenue numbers steady, they also administered a modest increase to per-share loss expectations.

As a result, there was no major change to the consensus price target of US$14.88, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite 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 Ocular Therapeutix, with the most bullish analyst valuing it at US$22.00 and the most bearish at US$11.00 per share. 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.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Ocular Therapeutix's revenue growth is expected to slow, with the forecast 17% annualised growth rate until the end of 2024 being well below the historical 39% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 9.5% per year. So it's pretty clear that, while Ocular Therapeutix's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Ocular Therapeutix. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$14.88, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Ocular Therapeutix going out to 2026, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 2 warning signs for Ocular Therapeutix (of which 1 is significant!) you should know about.

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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.

About NasdaqGM:OCUL

Ocular Therapeutix

A biopharmaceutical company, focuses on the formulation, development, and commercialization of therapies for diseases and conditions of the eye using its bioresorbable hydrogel-based formulation technology in the United States.

Excellent balance sheet with limited growth.