Results: ACADIA Pharmaceuticals Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

It's been a mediocre week for ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) shareholders, with the stock dropping 11% to US$15.25 in the week since its latest quarterly results. It looks like a credible result overall - although revenues of US$206m were what the analysts expected, ACADIA Pharmaceuticals surprised by delivering a (statutory) profit of US$0.10 per share, an impressive 86% above what was forecast. 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.

See our latest analysis for ACADIA Pharmaceuticals

Taking into account the latest results, the most recent consensus for ACADIA Pharmaceuticals from 19 analysts is for revenues of US$953.5m in 2024. If met, it would imply a solid 17% increase on its revenue over the past 12 months. Earnings are expected to improve, with ACADIA Pharmaceuticals forecast to report a statutory profit of US$0.61 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$966.4m and earnings per share (EPS) of US$0.63 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target fell 5.5% to US$27.16, with the analysts clearly linking lower forecast earnings to the performance of the stock price. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values ACADIA Pharmaceuticals at US$39.00 per share, while the most bearish prices it at US$13.00. 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.

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. It's clear from the latest estimates that ACADIA Pharmaceuticals' rate of growth is expected to accelerate meaningfully, with the forecast 24% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 18% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 19% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect ACADIA Pharmaceuticals to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of ACADIA Pharmaceuticals' future valuation.

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 forecasts for ACADIA Pharmaceuticals going out to 2026, 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.