One of the biggest stories of last week was how Emergent BioSolutions Inc. (NYSE:EBS) shares plunged 20% in the week since its latest full-year results, closing yesterday at US$5.80. Revenues of US$1.0b came in 5.4% below estimates, but statutory losses were well contained with a per-share loss of US$3.60 being some 13% smaller than what the analysts were predicting. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Emergent BioSolutions

Taking into account the latest results, the current consensus, from the two analysts covering Emergent BioSolutions, is for revenues of US$825.0m in 2025. This implies a stressful 21% reduction in Emergent BioSolutions' revenue over the past 12 months. Emergent BioSolutions is also expected to turn profitable, with statutory earnings of US$0.63 per share. Before this earnings report, the analysts had been forecasting revenues of US$1.13b and earnings per share (EPS) of US$1.13 in 2025. Indeed, we can see that the analysts are a lot more bearish about Emergent BioSolutions' prospects following the latest results, administering a pretty serious reduction to revenue estimates and slashing their EPS estimates to boot.

The average price target climbed 69% to US$13.50despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One more thing stood out to us about these estimates, and it's the idea that Emergent BioSolutions' decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 21% to the end of 2025. This tops off a historical decline of 5.9% a year over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 20% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Emergent BioSolutions to suffer worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2027, which can be seen for free on our platform here.

You can also see whether Emergent BioSolutions is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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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.