US$18.00: That's What Analysts Think Zevra Therapeutics, Inc. (NASDAQ:ZVRA) Is Worth After Its Latest Results

As you might know, Zevra Therapeutics, Inc. (NASDAQ:ZVRA) last week released its latest yearly, and things did not turn out so great for shareholders. The numbers were fairly weak, with sales of US$10m missing analyst predictions by 7.0%, and (statutory) losses of US$1.20 per share being slightly larger than what the analysts had expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Zevra Therapeutics

After the latest results, the four analysts covering Zevra Therapeutics are now predicting revenues of US$18.5m in 2023. If met, this would reflect a substantial 77% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 24% to US$0.91. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$19.4m and losses of US$0.65 per share in 2023. While this year's revenue estimates dropped there was also a massive increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

The average price target fell 6.9% to US$18.00, implicitly signalling that lower earnings per share are a leading indicator for Zevra Therapeutics' valuation. 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 Zevra Therapeutics, with the most bullish analyst valuing it at US$23.00 and the most bearish at US$10.00 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.

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. It's clear from the latest estimates that Zevra Therapeutics' rate of growth is expected to accelerate meaningfully, with the forecast 77% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 39% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.9% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Zevra Therapeutics to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Zevra Therapeutics going out to 2025, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.