Investors in Harmony Biosciences Holdings, Inc. (NASDAQ:HRMY) had a good week, as its shares rose 7.7% to close at US$31.57 following the release of its first-quarter results. It looks like a credible result overall - although revenues of US$155m were in line with what the analysts predicted, Harmony Biosciences Holdings surprised by delivering a statutory profit of US$0.67 per share, a notable 11% above expectations. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Harmony Biosciences Holdings

After the latest results, the eight analysts covering Harmony Biosciences Holdings are now predicting revenues of US$711.6m in 2024. If met, this would reflect a meaningful 15% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to dip 4.1% to US$2.33 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$710.8m and earnings per share (EPS) of US$2.95 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$42.25, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Harmony Biosciences Holdings, with the most bullish analyst valuing it at US$56.00 and the most bearish at US$28.00 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Harmony Biosciences Holdings' past performance and to peers in the same industry. We would highlight that Harmony Biosciences Holdings' revenue growth is expected to slow, with the forecast 21% annualised growth rate until the end of 2024 being well below the historical 34% p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 9.2% per year. Even after the forecast slowdown in growth, it seems obvious that Harmony Biosciences Holdings is also expected 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 Harmony Biosciences Holdings. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$42.25, with the latest estimates not enough to have an impact on their price targets.

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. We have forecasts for Harmony Biosciences Holdings going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Harmony Biosciences Holdings that you need to take into consideration.

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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.