Yahoo Finance Heron Therapeutics, Inc. (NASDAQ:HRTX) Just Released Its First-Quarter Earnings: Here's What Analysts Think
A week ago, Heron Therapeutics, Inc. (NASDAQ:HRTX) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. Revenues and losses per share were both better than expected, with revenues of US$35m leading estimates by 5.1%. Statutory losses were smaller than the analystsexpected, coming in at US$0.02 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for Heron Therapeutics
After the latest results, the four analysts covering Heron Therapeutics are now predicting revenues of US$147.9m in 2024. If met, this would reflect a decent 12% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 54% to US$0.24. Before this latest report, the consensus had been expecting revenues of US$144.9m and US$0.21 per share in losses. While this year's revenue estimates increased, there was also a notable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
The consensus price target stayed unchanged at US$6.75, seeming to suggest that higher forecast losses are not expected to have a long term impact on the 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. Currently, the most bullish analyst values Heron Therapeutics at US$9.00 per share, while the most bearish prices it at US$5.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. For example, we noticed that Heron Therapeutics' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 16% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 0.6% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 18% annually. So while Heron Therapeutics' revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. They also upgraded their revenue forecasts, although the latest estimates suggest that Heron Therapeutics will grow in line with the overall industry. The consensus price target held steady at US$6.75, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Heron Therapeutics going out to 2026, and you can see them free on our platform here..
You still need to take note of risks, for example - Heron Therapeutics has 3 warning signs (and 1 which is a bit unpleasant) we think you should know about.
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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.
