Nektar Therapeutics (NASDAQ:NKTR) Just Released Its Third-Quarter Earnings: Here's What Analysts Think
Nektar Therapeutics (NASDAQ:NKTR) just released its quarterly report and things are looking bullish. The results were impressive, with revenues of US$30m exceeding analyst forecasts by 32%, and statutory losses of US$0.61 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for Nektar Therapeutics
Taking into account the latest results, the current consensus from Nektar Therapeutics’ 13 analysts is for revenues of US$179.3m in 2021, which would reflect a decent 9.8% increase on its sales over the past 12 months. Losses are expected to increase slightly, to US$2.53 per share. Before this latest report, the consensus had been expecting revenues of US$177.4m and US$2.61 per share in losses. It looks like there’s been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers were unchanged.
There’s been no major changes to the consensus price target of US$31.07, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock’s valuation. There’s another way to think about price targets though, and that’s to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Nektar Therapeutics, with the most bullish analyst valuing it at US$80.00 and the most bearish at US$17.00 per share. So we wouldn’t be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn’t rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. Next year brings more of the same, according to the analysts, with revenue forecast to grow 9.8%, in line with its 11% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 6.7% per year. So although Nektar Therapeutics is expected to maintain its revenue growth rate, it’s definitely expected to grow faster 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. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations – and our data suggests that revenues are expected to grow faster than the wider industry. 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 Nektar Therapeutics going out to 2024, 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 3 warning signs with Nektar Therapeutics , and understanding them should be part of your investment process.
This article by Simply Wall St is general in nature. 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected].
