Earnings Report: Pharming Group N.V. Missed Revenue Estimates By 11%
One of the biggest stories of last week was how Pharming Group N.V. (AMS:PHARM) shares plunged 20% in the week since its latest half-year results, closing yesterday at €0.88. Revenues were US$163m, 11% below analyst expectations, although losses didn't appear to worsen significantly, with a per-share statutory loss of US$0.004 being in line with what the analysts 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the consensus forecast from Pharming Group's five analysts is for revenues of US$393.7m in 2026. This reflects a reasonable 7.4% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 146% to US$0.032. In the lead-up to this report, the analysts had been modelling revenues of US$405.3m and earnings per share (EPS) of US$0.031 in 2026. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.
Check out our latest analysis for Pharming Group
The consensus has made no major changes to the price target of €2.27, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. 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. The most optimistic Pharming Group analyst has a price target of €2.45 per share, while the most pessimistic values it at €1.97. This is a very narrow spread of estimates, implying either that Pharming Group is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2026 brings more of the same, according to the analysts, with revenue forecast to display 15% growth on an annualised basis. That is in line with its 16% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 15% annually. So although Pharming Group is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Pharming Group following these results. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. Still, earnings are more important to the intrinsic value of the business. The consensus price target held steady at €2.27, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Pharming Group analysts - going out to 2028, and you can see them free on our platform here.
It is also worth noting that we have found 2 warning signs for Pharming Group (1 is significant!) that you need to take into consideration.
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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.