It's been a good week for La Jolla Pharmaceutical Company (NASDAQ:LJPC) shareholders, because the company has just released its latest quarterly results, and the shares gained 9.1% to US$7.58. Results look to have been somewhat negative - revenue fell 6.3% short of analyst estimates at US$7.6m, although statutory losses were somewhat better. The per-share loss was US$0.32, 56% smaller than the analysts were expecting prior to the result. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for La Jolla Pharmaceutical

Taking into account the latest results, the most recent consensus for La Jolla Pharmaceutical from two analysts is for revenues of US$34.6m in 2020 which, if met, would be a substantial 32% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 42% to US$2.00. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$37.0m and losses of US$2.47 per share in 2020. While the revenue estimates fell, sentiment seems to have improved, with the analysts making a losses per share in particular.

There was no major change to the US$12.00 average price target, suggesting that the adjustments to revenue and earnings are not expected to have a long-term impact on the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that La Jolla Pharmaceutical's revenue growth will slow down substantially, with revenues next year expected to grow 32%, compared to a historical growth rate of 94% over the past three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 18% next year. So it's pretty clear that, while La Jolla Pharmaceutical's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. They also downgraded their revenue estimates, although industry data suggests that La Jolla Pharmaceutical's revenues are expected to grow faster than the wider industry. Even so, long term profitability is more important for the value creation process. 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.