Need To Know: Analysts Are Much More Bullish On MEI Pharma, Inc. (NASDAQ:MEIP) Revenues

Celebrations may be in order for MEI Pharma, Inc. (NASDAQ:MEIP) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. Investors have been pretty optimistic on MEI Pharma too, with the stock up 22% to US$4.21 over the past week. Could this upgrade be enough to drive the stock even higher?

Following the upgrade, the consensus from seven analysts covering MEI Pharma is for revenues of US$18m in 2021, implying a substantial 54% decline in sales compared to the last 12 months. Per-share losses are expected to explode, reaching US$0.52 per share. However, before this estimates update, the consensus had been expecting revenues of US$13m and US$0.48 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts lifting this year's revenue estimates, while at the same time increasing their loss per share forecasts to reflect the cost of achieving this growth.

View our latest analysis for MEI Pharma

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Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with the forecast 54% revenue decline a notable change from historical growth of 98% over the last three years. 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 - MEI Pharma is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at MEI Pharma.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for MEI Pharma going out to 2025, and you can see them free on our platform here..

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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