It's been a pretty great week for Cosmo Pharmaceuticals N.V. (VTX:COPN) shareholders, with its shares surging 17% to CHF73.90 in the week since its latest full-year results. Revenues came in at €62m, an impressive 33% ahead of analyst forecasts. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. 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 Cosmo Pharmaceuticals

After the latest results, the consensus from Cosmo Pharmaceuticals' two analysts is for revenues of €53.8m in 2020, which would reflect a not inconsiderable 14% decline in sales compared to the last year of performance. The loss per share is expected to greatly reduce in the near future, narrowing 70% to €0.50. Before this latest report, the consensus had been expecting revenues of €58.6m and €0.59 per share in losses. Although the revenue estimates have fallen somewhat, Cosmo Pharmaceuticals'future looks a little different to the past, with a the loss per share forecasts in particular.

The analysts have cut their price target 7.7% to €93.64 per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses.

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. One more thing stood out to us about these estimates, and it's the idea that Cosmo Pharmaceuticals'decline is expected to accelerate, with revenues forecast to fall 14% next year, topping off a historical decline of 2.4% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 3.3% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Cosmo Pharmaceuticals to suffer worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Cosmo Pharmaceuticals. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Cosmo Pharmaceuticals that you should be aware of.

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