Halozyme Therapeutics, Inc. Just Released Its Annual Results And Analysts Are Updating Their Estimates
Halozyme Therapeutics, Inc. (NASDAQ:HALO) came out with its annual results last week, and we wanted to see how the business is performing and what top analysts think of the company following this report. Revenues of US$196m were in line with expectations, although statutory losses per share were US$0.50, some 14% smaller than was expected. 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. We've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.
See our latest analysis for Halozyme Therapeutics
Taking into account the latest results, the most recent consensus for Halozyme Therapeutics from nine analysts is for revenues of US$238.2m in 2020, which is a sizeable 22% increase on its sales over the past 12 months. Halozyme Therapeutics is also expected to turn profitable, with statutory earnings of US$0.62 per share. Before this earnings report, analysts had been forecasting revenues of US$224.1m and earnings per share (EPS) of US$0.59 in 2020. It looks like there's been a modest increase in sentiment following the latest results, with analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
Although analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$23.92, suggesting that the forecast performance does not have a long term impact on the company's 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. There are some variant perceptions on Halozyme Therapeutics, with the most bullish analyst valuing it at US$35.00 and the most bearish at US$12.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Further, we can compare these estimates to past performance, and see how Halozyme Therapeutics forecasts compare to the wider market's forecast performance. It's clear from the latest estimates that Halozyme Therapeutics's rate of growth is expected to accelerate meaningfully, with forecast 22% revenue growth noticeably faster than its historical growth of 16%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 17% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Halozyme Therapeutics is expected to grow much faster than its market.
The Bottom Line
The most important thing to take away from this is that analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Halozyme Therapeutics following these results. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider market. 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Halozyme Therapeutics 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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