Today is shaping up negative for RVL Pharmaceuticals plc (NASDAQ:RVLP) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative. Investors however, have been notably more optimistic about RVL Pharmaceuticals recently, with the stock price up an impressive 10% to US$0.90 in the past week. It will be interesting to see if the downgrade has an impact on buying demand for the company's shares.
After this downgrade, RVL Pharmaceuticals' five analysts are now forecasting revenues of US$49m in 2023. This would be a major 32% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 34% to US$0.38. However, before this estimates update, the consensus had been expecting revenues of US$60m and US$0.38 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also making no real change to the loss per share numbers.
View our latest analysis for RVL Pharmaceuticals
The consensus price target rose 5.4% to US$3.60, seeming to imply that weaker revenue sentiment is not expected to have a major impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on RVL Pharmaceuticals, with the most bullish analyst valuing it at US$6.00 and the most bearish at US$2.00 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. As a result it might not be possible to derive much meaning from 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. One thing stands out from these estimates, which is that RVL Pharmaceuticals is forecast to grow faster in the future than it has in the past, with revenues expected to display 45% annualised growth until the end of 2023. If achieved, this would be a much better result than the 47% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 7.0% per year. So it looks like RVL Pharmaceuticals is expected to grow faster than its competitors, at least for a while.