Medexus Pharmaceuticals Inc. Just Missed EPS By 55%: Here's What Analysts Think Will Happen Next
It's been a good week for Medexus Pharmaceuticals Inc. (TSE:MDP) shareholders, because the company has just released its latest first-quarter results, and the shares gained 8.0% to CA$5.37. Statutory earnings per share disappointed, coming in -55% short of expectations, at US$0.02. Fortunately revenue performance was a lot stronger at US$28m arriving 11% ahead of predictions. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Medexus Pharmaceuticals after the latest results.
Taking into account the latest results, the most recent consensus for Medexus Pharmaceuticals from six analysts is for revenues of US$116.5m in 2027. If met, it would imply a notable 13% increase on its revenue over the past 12 months. Medexus Pharmaceuticals is also expected to turn profitable, with statutory earnings of US$0.22 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$115.0m and earnings per share (EPS) of US$0.30 in 2027. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.
View our latest analysis for Medexus Pharmaceuticals
Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 6.5% to CA$7.25, suggesting the revised estimates are not indicative of a weaker long-term future for the business. 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. There are some variant perceptions on Medexus Pharmaceuticals, with the most bullish analyst valuing it at CA$9.00 and the most bearish at CA$6.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Medexus Pharmaceuticals shareholders.
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. It's clear from the latest estimates that Medexus Pharmaceuticals' rate of growth is expected to accelerate meaningfully, with the forecast 17% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 5.7% 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 9.8% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Medexus Pharmaceuticals to grow faster than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Medexus Pharmaceuticals. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Medexus Pharmaceuticals. Long-term earnings power is much more important than next year's profits. We have forecasts for Medexus Pharmaceuticals going out to 2029, and you can see them free on our platform here.
It might also be worth considering whether Medexus Pharmaceuticals' debt load is appropriate, using our debt analysis tools on the Simply Wall St 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.