Party Time: Brokers Just Made Major Increases To Their Amylyx Pharmaceuticals, Inc. (NASDAQ:AMLX) Earnings Forecasts
Amylyx Pharmaceuticals, Inc. (NASDAQ:AMLX) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year’s forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance.
After the upgrade, the five analysts covering Amylyx Pharmaceuticals are now predicting revenues of US$328m in 2023. If met, this would reflect a huge improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 87% to US$0.38. Yet before this consensus update, the analysts had been forecasting revenues of US$167m and losses of US$1.65 per share in 2023. We can see there’s definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to this year’s revenue estimates, while at the same time reducing their loss estimates.
View our latest analysis for Amylyx Pharmaceuticals
Despite these upgrades, the analysts have not made any major changes to their price target of US$50.20, implying that their latest estimates don’t have a long term impact on what they think the stock is worth. There’s another way to think about price targets though, and that’s to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Amylyx Pharmaceuticals analyst has a price target of US$54.00 per share, while the most pessimistic values it at US$47.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Amylyx Pharmaceuticals is an easy business to forecast or the underlying assumptions are obvious.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Amylyx Pharmaceuticals’ growth to accelerate, with the forecast 14x annualised growth to the end of 2023 ranking favourably alongside historical growth of 96% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.1% annually. Factoring in the forecast acceleration in revenue, it’s pretty clear that Amylyx Pharmaceuticals is expected to grow much faster than its industry.
The Bottom Line
The most important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around Amylyx Pharmaceuticals’ prospects. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year’s earnings expectations, it might be time to take another look at Amylyx Pharmaceuticals.
It’s great to see the analysts upgrading their estimates, but the biggest highlight to us is that the business is expected to become profitable in the foreseeable future. For more information, you can click through to our free platform to learn more about these forecasts.
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.
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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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