Idorsia Ltd Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Idorsia Ltd (VTX:IDIA) shareholders are probably feeling a little disappointed, since its shares fell 3.2% to CHF2.15 in the week after its latest first-quarter results. It was a shocking result from a revenue perspective, with revenues falling 35% short of analyst expectations. There was one bright spot though, with Idorsia reporting a surprise (statutory) profit of CHF0.13, defying analyst expectations of a loss. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Idorsia

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Taking into account the latest results, the six analysts covering Idorsia provided consensus estimates of CHF135.3m revenue in 2024, which would reflect a measurable 4.3% decline over the past 12 months. Per-share losses are expected to explode, reaching CHF1.49 per share. Before this earnings announcement, the analysts had been modelling revenues of CHF242.6m and losses of CHF1.24 per share in 2024. There's been a definite change in sentiment in this update, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

There was no major change to the consensus price target of CHF1.69, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. 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 Idorsia analyst has a price target of CHF2.60 per share, while the most pessimistic values it at CHF1.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for 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. We would highlight that revenue is expected to reverse, with a forecast 5.7% annualised decline to the end of 2024. That is a notable change from historical growth of 27% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 18% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Idorsia is expected to lag the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Idorsia. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Idorsia going out to 2026, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 5 warning signs for Idorsia (of which 4 can't be ignored!) you should know about.

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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.