Analysts Are Upgrading Tarsus Pharmaceuticals, Inc. (NASDAQ:TARS) After Its Latest Results

Tarsus Pharmaceuticals, Inc. (NASDAQ:TARS) just released its latest first-quarter results and things are looking bullish. Results clearly exceeded expectations, with a substantial revenue beat leading to smaller losses in what looks like a definite win for investors. Revenues were US$28m and the statutory loss per share was US$1.01, smaller than the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Tarsus Pharmaceuticals

After the latest results, the seven analysts covering Tarsus Pharmaceuticals are now predicting revenues of US$139.8m in 2024. If met, this would reflect a substantial 228% improvement in revenue compared to the last 12 months. Losses are expected to hold steady at around US$3.88. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$103.3m and losses of US$4.22 per share in 2024. 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.

It will come as no surprise to learn thatthe analysts have increased their price target for Tarsus Pharmaceuticals 5.9% to US$55.56on the back of these upgrades. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Tarsus Pharmaceuticals, with the most bullish analyst valuing it at US$67.00 and the most bearish at US$34.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Tarsus Pharmaceuticals is forecast to grow faster in the future than it has in the past, with revenues expected to display 4x annualised growth until the end of 2024. If achieved, this would be a much better result than the 30% annual decline over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 9.4% per year. So it looks like Tarsus Pharmaceuticals is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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 Tarsus Pharmaceuticals analysts - going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Tarsus Pharmaceuticals that we have uncovered.

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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.