One thing we could say about the analysts on Fennec Pharmaceuticals Inc. (NASDAQ:FENC) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the downgrade, the most recent consensus for Fennec Pharmaceuticals from its six analysts is for revenues of US$54m in 2024 which, if met, would be a decent 11% increase on its sales over the past 12 months. Per-share earnings are expected to surge 100% to US$0.20. Previously, the analysts had been modelling revenues of US$63m and earnings per share (EPS) of US$0.51 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a large cut to earnings per share numbers as well.

Check out our latest analysis for Fennec Pharmaceuticals

It'll come as no surprise then, to learn that the analysts have cut their price target 5.9% to US$15.83.

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 pretty clear that there is an expectation that Fennec Pharmaceuticals' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 24% growth on an annualised basis. This is compared to a historical growth rate of 95% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 23% annually. So it's pretty clear that, while Fennec Pharmaceuticals' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Fennec Pharmaceuticals. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

That said, the analysts might have good reason to be negative on Fennec Pharmaceuticals, given dilutive stock issuance over the past year. For more information, you can click here to discover this and the 1 other risk we've identified.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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