KemPharm, Inc. (NASDAQ:KMPH) Third-Quarter Results: Here's What Analysts Are Forecasting For Next Year

KemPharm, Inc. (NASDAQ:KMPH) missed earnings with its latest third-quarter results, disappointing overly-optimistic forecasters. It was a pretty negative result overall, with revenues of US$2.9m missing analyst predictions by 4.6%. Worse, the business reported a statutory loss of US$0.19 per share, much larger than the analysts had forecast prior to the result. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for KemPharm

Taking into account the latest results, the consensus forecast from KemPharm's three analysts is for revenues of US$21.9m in 2023, which would reflect a major 104% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 36% to US$0.66. Before this latest report, the consensus had been expecting revenues of US$21.7m and US$0.65 per share in losses.

As a result there was no major change to the consensus price target of US$19.00, implying that the business is trading roughly in line with expectations despite ongoing losses. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic KemPharm analyst has a price target of US$28.00 per share, while the most pessimistic values it at US$10.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. It's clear from the latest estimates that KemPharm's 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 47% 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 4.0% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect KemPharm to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for KemPharm going out to 2024, 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.

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