As you might know, Heron Therapeutics, Inc. (NASDAQ:HRTX) just kicked off its latest annual results with some very strong numbers. Results overall were solid, with revenues arriving 2.4% better than analyst forecasts at US$144m. Higher revenues also resulted in substantially lower statutory losses which, at US$0.09 per share, were 2.4% smaller than the analysts expected. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Heron Therapeutics

Taking into account the latest results, the most recent consensus for Heron Therapeutics from three analysts is for revenues of US$158.2m in 2025. If met, it would imply a decent 9.6% increase on its revenue over the past 12 months. Per-share statutory losses are expected to explode, reaching US$0.037 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$160.6m and earnings per share (EPS) of US$0.0033 in 2025. So despite reconfirming their revenue estimates, the analysts are now forecasting a loss instead of a profit, which looks like a definite drop in sentiment following the latest results.

The consensus price target fell 14% to US$6.00per share, with the analysts clearly concerned by ballooning losses. 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 Heron Therapeutics, with the most bullish analyst valuing it at US$9.00 and the most bearish at US$4.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Heron Therapeutics' past performance and to peers in the same industry. The analysts are definitely expecting Heron Therapeutics' growth to accelerate, with the forecast 9.6% annualised growth to the end of 2025 ranking favourably alongside historical growth of 4.4% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 20% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Heron Therapeutics is expected to grow slower than the wider industry.

The Bottom Line

The biggest low-light for us was that the forecasts for Heron Therapeutics dropped from profits to a loss next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Heron Therapeutics. Long-term earnings power is much more important than next year's profits. We have forecasts for Heron Therapeutics going out to 2027, 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 2 warning signs with Heron Therapeutics (at least 1 which makes us a bit uncomfortable) , and understanding these 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.