Alliance Pharma plc (LON:APH) just released its latest yearly report and things are not looking great. Results showed a clear earnings miss, with UK£167m revenue coming in 2.2% lower than what the analystsexpected. Statutory earnings per share (EPS) of UK£0.0017 missed the mark badly, arriving some 95% below what was expected. 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. 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 Alliance Pharma  earnings-and-revenue-growth

Following the latest results, Alliance Pharma's six analysts are now forecasting revenues of UK£188.6m in 2023. This would be a solid 13% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 2,381% to UK£0.043. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£189.6m and earnings per share (EPS) of UK£0.044 in 2023. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target fell 6.2% to UK£0.91, with the analysts clearly linking lower forecast earnings to the performance of the stock price. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Alliance Pharma, with the most bullish analyst valuing it at UK£1.05 and the most bearish at UK£0.65 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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. It's clear from the latest estimates that Alliance Pharma's rate of growth is expected to accelerate meaningfully, with the forecast 13% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 9.6% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.5% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Alliance Pharma to grow faster than the wider industry.



The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Alliance Pharma. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Alliance Pharma's future valuation.

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 Alliance Pharma going out to 2025, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk.  We've identified 3 warning signs  with Alliance Pharma , and understanding them should be part of your investment process.

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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.

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