There's been a major selloff in Athenex, Inc. (NASDAQ:ATNX) shares in the week since it released its annual report, with the stock down 55% to US$5.38. Revenues were a bright spot, with US$144m in sales arriving 5.8% ahead of expectations, although statutory earnings didn't fare nearly so well, recording a loss of US$1.72, some 9.4% below consensus predictions. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for Athenex
Taking into account the latest results, the current consensus, from the nine analysts covering Athenex, is for revenues of US$138.6m in 2021, which would reflect a measurable 4.0% reduction in Athenex's sales over the past 12 months. Losses are expected to be contained, narrowing 12% from last year to US$1.52. Before this latest report, the consensus had been expecting revenues of US$178.3m and US$1.18 per share in losses. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.
The consensus price target fell 55% to US$12.29, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Athenex analyst has a price target of US$33.00 per share, while the most pessimistic values it at US$5.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. 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.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 4.0% by the end of 2021. This indicates a significant reduction from annual growth of 41% 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. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Athenex is expected to lag the wider industry.