Dicerna Pharmaceuticals, Inc. (NASDAQ:DRNA) shares fell 5.3% to US$19.71 in the week since its latest full-year results. Revenues came in at US$24m, a whole 51% below what analysts were forecasting. Losses were a (relative) bright spot by comparison, with a per-share (statutory) loss of US$1.76 substantially smaller than what analysts had expected. This is an important time for investors, as they can track a company’s performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for Dicerna Pharmaceuticals
Following the latest results, Dicerna Pharmaceuticals’s seven analysts are now forecasting revenues of US$281.0m in 2020. This would be a huge 1076% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Dicerna Pharmaceuticals forecast to report a statutory profit of US$1.28 per share. Before this earnings announcement, analysts had been forecasting revenues of US$141.3m and losses of US$0.12 per share in 2020. So we can see that the latest results have sparked a pretty clear upgrade to expectations, with higher revenues expected to lead to profit sooner than previously forecast.
Although analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$32.25, suggesting that the forecast performance does not have a long term impact on the company’s valuation Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company’s valuation. There are some variant perceptions on Dicerna Pharmaceuticals, with the most bullish analyst valuing it at US$50.00 and the most bearish at US$20.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Further, we can compare these estimates to past performance, and see how Dicerna Pharmaceuticals forecasts compare to the wider market’s forecast performance. Analysts are definitely expecting Dicerna Pharmaceuticals’s growth to accelerate, with the forecast 1076% growth ranking favourably alongside historical growth of 112% per annum over the past three years. Compare this with other companies in the same market, which are forecast to grow their revenue 16% next year. Factoring in the forecast acceleration in revenue, it’s pretty clear that Dicerna Pharmaceuticals is expected to grow much faster than its market.
The Bottom Line
The most important thing to take away from these updates is that analysts now expect Dicerna Pharmaceuticals to become profitable next year, compared to previous expectations that it would report a loss. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider market. The consensus price target held steady at US$32.25, with the latest estimates not enough to have an impact on analysts’ estimated valuations.
With that in mind, we wouldn’t be too quick to come to a conclusion on Dicerna Pharmaceuticals. Long-term earnings power is much more important than next year’s profits. We have forecasts for Dicerna Pharmaceuticals going out to 2024, and you can see them free on our platform here.
We also provide an overview of the Dicerna Pharmaceuticals Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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