A handful of analysts offering 12-month price forecasts for Minerva Neuroscienes Inc (NASDAQ: NERV) have placed a median price target of $17. This is on the higher end of the range which includes $6 on the low end and $24 on the high.
In the first week of September the current price—around $11—is nearly in the center of the 52-week range, with a low $2.51 and a high of $16.80. Minerva also has market cap (net worth) $58.8 million, with an enterprise value of $8.73
All this considered, analysts have given NERV stock a rating of BUY, which actually makes this 8 straight months of BUY ratings.
Quarterly Earnings Indicate Slow Climb Out of the Red
As mentioned above, Minerva Neurosciences Inc has not been around for very long, barely 7 years on the Nasdaq. Actually, this was on the Nasdaq Global Market, but NERV will soon be a ticker symbol on the Nasdaq Capital Market, when Minerva transfers to that index next week. Whether this news has had any affect on the stock remains to be seen; but we may have some inkling when the company releases their next earnings report on November 7, 2022.
Until that time the relatively consistent Earnings Per Share numbers for the past few quarters will leave much to anticipate. That said, in the past year, earnings failed to meet the consensus estimate 3 out of 4 quarters. In Q3 of 2021 analysts provided an estimate range of -$2 to -$1.60 with a consensus estimate of -$1.74. Reported earnings for the quarter came in -$1.76.
Fourth quarter of 2021 actually fared much worse. The estimated range for the quarter was -$1.68 to -$1.40 with a consensus estimate of -$1.49. If the margins had been equivalent to the previous quarter, the report could have been regarded as positive. Unfortunately, Minerva Neurosciences Inc reported a substantially bigger loss, with earnings of -$4.00
The next year did not get off to a good start, though the numbers were admittedly improved from the prior quarter. Accordingly, Q1 of 2022 carried an analyst earnings range of -$1.76 to -$1.32 with a consensus estimate of -$1.47. The actual reported earnings for the quarter actually failed to meet the range at all, falling short at -$1.84.
By the middle of this year, things started to look favorable for NERV stock. Specifically, this is the only three-month period in which the stock beat the consensus estimate. For the second quarter of 2022, analysts provided a range of -$1.84 to -$1.52 with a consensus estimate of -$1.66. NERV stock finally beat the estimated wit a reported earnings of -$1.63.
Annual Earnings Follow Suit
In terms of annual earnings, the numbers tell a bit of a different story. Similarly to quarterly trends this past year, three out of the four previous years posted annual earnings that failed to beat the consensus estimate.
For example, 2018 had an earnings range estimate of -$10.72 to -$9.82 with a consensus estimate of -$10.26. Sure enough, the actual reported earnings of -$10.32 for the year did not beat the consensus estimate.
The next year, actually fared much worse. While the range estimate of -$11.72 was on the lower end of the -$12.64 to -$11.28 range, actual annual earnings failed to meet even the bottom of the range. Annual earnings for 2019 was a shocking -$14.80
2020 was the only year NERV to entertain a high estimate in the green and also the only year where annual earnings beat the estimate. The consensus estimate was an optimistic $0.24 but the reported earnings outperformed at $0.40. Unfortunately, 2021 reported earnings of -$9.36 failed to meet the range again.
Slow Sales Could Be A Factor
The gradual slip in earnings easily makes sense when you take a closer look at sales, where growth has been effectively in the red since the stock hit its peak value of $114.24 on 5/11/2020. This earnings spike plummeted to around $30 in the next two weeks, which began the slow drip to where we are today.
For one, the company's operating income has been negative every year since the IPO, ranging from -26 to -75 between 2016 and 2019; then again at -45 in 2021. 2020 was actually the only year the company posted any positive numbers. Revenue and gross profit for 2020 came in around 41 and the operating income—again, historically widely in the red—peaked over even at just 1.85. Net income followed the same trend, of course.
All this in mind, analysts still suggest this NERV is a suitable BUY right now.
