A week ago, Aquestive Therapeutics, Inc. (NASDAQ:AQST) came out with a strong set of second-quarter numbers that could potentially lead to a re-rate of the stock. The results were impressive, with revenues of US$20m exceeding analyst forecasts by 62%, and statutory losses of US$0.03 were likewise much smaller than the analysts had forecast. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
After the latest results, the consensus from Aquestive Therapeutics' eight analysts is for revenues of US$54.6m in 2024, which would reflect a measurable 6.5% decline in revenue compared to the last year of performance. Per-share losses are expected to explode, reaching US$0.48 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$49.8m and losses of US$0.54 per share in 2024. So it seems there's been a definite increase in optimism about Aquestive Therapeutics' future following the latest consensus numbers, with a cut to the loss per share forecasts in particular.
Yet despite these upgrades, the analysts cut their price target 6.2% to US$8.56, implicitly signalling that the ongoing losses are likely to weigh negatively on Aquestive Therapeutics' valuation. 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. There are some variant perceptions on Aquestive Therapeutics, with the most bullish analyst valuing it at US$13.00 and the most bearish at US$5.50 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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. Over the past five years, revenues have declined around 0.8% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 13% decline in revenue until the end of 2024. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 9.4% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Aquestive Therapeutics 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. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Aquestive Therapeutics analysts - going out to 2026, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Aquestive Therapeutics (at least 1 which makes us a bit uncomfortable) , and understanding these should be part of your investment process.
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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.
