As you might know, HOOKIPA Pharma Inc. (NASDAQ:HOOK) last week released its latest third-quarter, and things did not turn out so great for shareholders. Earnings fell badly short of analyst estimates, with US$4.0m revenue falling -13% short, and statutory losses of US$0.53 per share being -20% greater than 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the five analysts covering HOOKIPA Pharma provided consensus estimates of US$15.3m revenue in 2021, which would reflect a not inconsiderable 15% decline on its sales over the past 12 months. Losses are forecast to balloon 48% to US$2.42 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$11.5m and losses of US$2.21 per share in 2021. Ergo, there's been a clear change in sentiment, with the analysts lifting next year's revenue estimates, while at the same time increasing their loss per share numbers to reflect the cost of achieving this growth.
It will come as a surprise to learn that the consensus price target rose 5.2% to US$18.67, with the analysts clearly more interested in growing revenue, even as losses intensify. 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 HOOKIPA Pharma at US$21.00 per share, while the most bearish prices it at US$16.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the HOOKIPA Pharma's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast revenue decline of 15%, a significant reduction from annual growth of 35% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 21% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - HOOKIPA Pharma is expected to lag the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at HOOKIPA Pharma. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for HOOKIPA Pharma going out to 2024, and you can see them free on our platform here.
Plus, you should also learn about the 2 warning signs we've spotted with HOOKIPA Pharma (including 1 which is a bit unpleasant) .
This article by Simply Wall St is general in nature. 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.
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