Last week, you might have seen that Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT) released its full-year result to the market. The early response was not positive, with shares down 7.2% to US$36.86 in the past week. Revenues of US$170m came in a modest 2.2% below forecasts. Statutory losses were a relative bright spot though, with a per-share loss of US$1.00 coming in a substantial 35% smaller than what the analysts had expected. 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.
After the latest results, the consensus from Arcturus Therapeutics Holdings' ten analysts is for revenues of US$162.2m in 2024, which would reflect a small 4.5% decline in revenue compared to the last year of performance. Per-share losses are expected to explode, reaching US$2.08 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$164.3m and losses of US$3.29 per share in 2024. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a considerable decrease in losses per share in particular.
There's been no major changes to the consensus price target of US$67.89, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock's valuation. 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 Arcturus Therapeutics Holdings analyst has a price target of US$140 per share, while the most pessimistic values it at US$18.00. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 4.5% by the end of 2024. This indicates a significant reduction from annual growth of 66% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 18% annually for the foreseeable future. It's pretty clear that Arcturus Therapeutics Holdings' revenues are expected to perform substantially 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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$67.89, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Arcturus Therapeutics Holdings. Long-term earnings power is much more important than next year's profits. We have forecasts for Arcturus Therapeutics Holdings 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.
