Analysts Just Made A Major Revision To Their Opiant Pharmaceuticals, Inc. (NASDAQ:OPNT) Revenue Forecasts

Today is shaping up negative for Opiant Pharmaceuticals, Inc. (NASDAQ:OPNT) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the latest downgrade, the four analysts covering Opiant Pharmaceuticals provided consensus estimates of US$20m revenue in 2022, which would reflect a substantial 58% decline on its sales over the past 12 months. Following this this downgrade, earnings are now expected to tip over into loss-making territory, with the analysts forecasting losses of US$4.10 per share in 2022. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$28m and losses of US$3.97 per share in 2022. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

Check out our latest analysis for Opiant Pharmaceuticals

The consensus price target was broadly unchanged at US$41.00, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. 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. The most optimistic Opiant Pharmaceuticals analyst has a price target of US$42.00 per share, while the most pessimistic values it at US$38.00. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Opiant Pharmaceuticals' past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 58% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 17% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.1% per year. It's pretty clear that Opiant Pharmaceuticals' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Opiant Pharmaceuticals. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Opiant Pharmaceuticals' revenues are expected to grow slower than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Opiant Pharmaceuticals after today.

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 Opiant Pharmaceuticals analysts - going out to 2024, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.