Zealand Pharma A/S (CPH:ZEAL) has just released its second quarter results: This is what analysts think

Investors in Zealand Pharma A/S Zeal Holdings Ltd. (CPH:ZEAL) had a good week as shares rose 6.9% to close at 951 krone following the release of second quarter results. Revenues of 34 million krone were 274% ahead of analyst models' expectations, although statutory losses of 4.67 krone per share were 12% higher than expected. Following the results announcement, analysts updated their earnings model and it would be good to know if they think the company's outlook has changed much or if it's business as usual. We thought readers would find it interesting to see the latest analysts' (statutory) forecasts for next year following the results announcement.

Check out our latest analysis for Zealand Pharma

Taking into account the latest results, the current consensus among Zealand Pharma's eight analysts is for revenues of NOK 631.8 million in 2024. This would represent a significant 72% increase in sales compared to the last 12 months. Losses are expected to increase slightly to NOK 10.97 per share. Prior to this earnings announcement, analysts had been forecasting revenues of NOK 610.5 million and losses of NOK 9.68 per share in 2024. While revenue estimates have increased for this year, there has also been a significant increase in loss per share expectations, suggesting that the consensus has a somewhat mixed view on the stock.

There were no major changes to the consensus price target of 1,015 krone, with rising sales seemingly enough to offset concerns about widening losses. However, another way to look at price targets is to look at the range of price targets suggested by analysts, as a wide range of estimates could suggest a different view of possible developments for the company. The most optimistic Zealand Pharma analyst has a price target of 1,106 krone per share, while the most pessimistic puts it at 800 krone. This shows that there is still some divergence in estimates, but analysts do not seem to be completely divided on the stock, as if it could be a make or break situation.

Now looking at the bigger picture, one of the ways we can understand these forecasts is by comparing them to past performance and industry growth estimates. The analysts definitely expect Zealand Pharma's growth to accelerate, with the forecast annual growth of 195% through the end of 2024 comparing well to the historical growth of 21% per year over the past five years. Compare this to other companies in the same industry which are forecast to grow revenues by 20% per year. It seems obvious that while the growth prospects are better than in the recent past, the analysts also expect Zealand Pharma to grow faster than the industry as a whole.

The conclusion

Most importantly, analysts have raised their loss per share estimates for next year. Encouragingly, they have also raised their revenue estimates and are forecasting that the company will grow faster than the wider industry. The consensus price target hasn't really changed, suggesting that the company's intrinsic value hasn't changed much with the latest estimates.

Continuing with this thought, we believe the company's long-term prospects are much more relevant than next year's earnings. We have estimates – from several New Zealand-based pharmaceutical analysts – out to 2026, and you can see them for free here on our platform.

And what about risks? Every company has them, and we have 3 warning signs for Zealand Pharma You should know about this.

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This Simply Wall St article is of a general nature. We comment solely on the basis of historical data and analyst forecasts, using an unbiased methodology. Our articles do not constitute financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.