Zevra Therapeutics, Inc. (NASDAQ:ZVRA) Just Reported And Analysts Have Been Cutting Their Estimates

It's been a sad week for Zevra Therapeutics, Inc. (NASDAQ:ZVRA), who've watched their investment drop 13% to US$5.03 in the week since the company reported its annual result. The results were mixed overall, with revenues slightly ahead of analyst estimates at US$27m. Statutory losses by contrast were 9.9% larger than predictions at US$1.30 per share. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Zevra Therapeutics

Taking into account the latest results, the current consensus from Zevra Therapeutics' six analysts is for revenues of US$29.3m in 2024. This would reflect a credible 6.8% increase on its revenue over the past 12 months. Losses are forecast to balloon 41% to US$1.55 per share. Before this latest report, the consensus had been expecting revenues of US$34.5m and US$1.20 per share in losses. There's been a definite change in sentiment in this update, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

The average price target was broadly unchanged at US$19.00, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Zevra Therapeutics at US$24.00 per share, while the most bearish prices it at US$15.00. 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.

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 Zevra Therapeutics' revenue growth is expected to slow, with the forecast 6.8% annualised growth rate until the end of 2024 being well below the historical 18% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.1% annually. Factoring in the forecast slowdown in growth, it seems obvious that Zevra Therapeutics is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Zevra Therapeutics. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$19.00, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Zevra Therapeutics. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Zevra Therapeutics going out to 2026, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 1 warning sign for Zevra Therapeutics that you need to be mindful of.

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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.