Celebrations may be in order for Marinus Pharmaceuticals, Inc. (NASDAQ:MRNS) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts have sharply increased their revenue numbers, with a view that Marinus Pharmaceuticals will make substantially more sales than they’d previously expected.
Following the upgrade, the latest consensus from Marinus Pharmaceuticals’ ten analysts is for revenues of US$26m in 2022, which would reflect a huge 67% improvement in sales compared to the last 12 months. Per-share losses are expected to creep up to US$2.82. However, before this estimates update, the consensus had been expecting revenues of US$18m and US$2.83 per share in losses. So there’s been quite a change-up of views after the recent consensus updates, withthe analysts noticeably increasing their revenue forecasts while also expecting losses per share to hold steady.
See our latest analysis for Marinus Pharmaceuticals
Analysts increased their price target 7.0% to US$30.22, perhaps signalling that higher revenues are a strong leading indicator for Marinus Pharmaceuticals’s valuation. That’s not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Marinus Pharmaceuticals analyst has a price target of US$50.00 per share, while the most pessimistic values it at US$17.00. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how think this business will perform. With this in mind, we wouldn’t rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Marinus Pharmaceuticals’ revenue growth is expected to slow, with the forecast 67% annualised growth rate until the end of 2022 being well below the historical 97% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.2% per year. Even after the forecast slowdown in growth, it seems obvious that Marinus Pharmaceuticals is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around Marinus Pharmaceuticals’ prospects. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Marinus Pharmaceuticals.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates – from multiple Marinus Pharmaceuticals analysts – going out to 2024, and you can see them free on our platform here.
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