There's been a notable change in appetite for Assertio Holdings, Inc. (NASDAQ:ASRT) shares in the week since its third-quarter report, with the stock down 16% to US$0.85. Revenues of US$29m arrived in line with expectations, although statutory losses per share were US$0.03, an impressive 35% smaller than what broker models predicted. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Assertio Holdings after the latest results.
Taking into account the latest results, Assertio Holdings' five analysts currently expect revenues in 2025 to be US$123.7m, approximately in line with the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 92% to US$0.06. Before this earnings announcement, the analysts had been modelling revenues of US$127.4m and losses of US$0.062 per share in 2025. 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 fell somewhat.
The analysts have cut their price target 10.0% to US$3.15per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses. 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. The most optimistic Assertio Holdings analyst has a price target of US$4.00 per share, while the most pessimistic values it at US$2.75. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2025 compared to the historical decline of 2.6% per annum 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 revenue grow 10% per year. So while a broad number of companies are forecast to grow, unfortunately Assertio Holdings is expected to see its revenue affected worse than other companies in the industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, long term profitability is more important for the value creation process. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on Assertio Holdings. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Assertio Holdings going out to 2026, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Assertio Holdings that you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
