Botanix Pharmaceuticals Limited (ASX:BOT) just released its latest yearly report and things are not looking great. It was a pretty negative result overall, with revenues of AU$35m missing analyst predictions by 2.9%. Worse, the business reported a statutory loss of AU$0.032 per share, much larger than the analysts had forecast prior to the result. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
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Taking into account the latest results, the current consensus from Botanix Pharmaceuticals’ three analysts is for revenues of AU$60.8m in 2027. This would reflect a substantial 74% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 61% to AU$0.01. Before this earnings announcement, the analysts had been modelling revenues of AU$63.8m and losses of AU$0.013 per share in 2027. While the revenue estimates fell, sentiment seems to have improved, with the analysts making a considerable decrease in losses per share in particular.
See our latest analysis for Botanix Pharmaceuticals
The consensus price target was broadly unchanged at AU$0.48, implying that the business is performing roughly in line with expectations, despite adjustments to both revenue and earnings estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Botanix Pharmaceuticals at AU$1.00 per share, while the most bearish prices it at AU$0.14. 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.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It’s clear from the latest estimates that Botanix Pharmaceuticals’ rate of growth is expected to accelerate meaningfully, with the forecast 74% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 54% 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 36% per year. Factoring in the forecast acceleration in revenue, it’s pretty clear that Botanix Pharmaceuticals is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. With that said, earnings are more important to the long-term value of the business. 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates – from multiple Botanix Pharmaceuticals analysts – going out to 2029, and you can see them free on our platform here.
However, before you get too enthused, we’ve discovered 3 warning signs for Botanix Pharmaceuticals (1 doesn’t sit too well with us!) that you should be aware of.
Valuation is complex, but we’re here to simplify it.
Discover if Botanix Pharmaceuticals might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
Have feedback on this article? Concerned about the content?Get in touchwith 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.
MI
mitchell_lawler
The Foxhole
A landmark settlement is meant to punish Meta (META). If the 1998 tobacco deal is any guide, it might protect it.
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About ASX:BOT
Botanix Pharmaceuticals
A pharmaceutical company, engages in the research and commercialization of solutions for skin diseases and infections in Australia and the United States.
Exceptional growth potential and undervalued.
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