Investors in Verona Pharma plc (NASDAQ:VRNA) had a good week, as its shares rose 2.5% to close at US$69.63 following the release of its yearly results. Revenues of US$42m beat expectations by a respectable 8.9%, although statutory losses per share increased. Verona Pharma lost US$2.16, which was 91% more than what the analysts had included in their models. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Verona Pharma after the latest results.

View our latest analysis for Verona Pharma

Taking into account the latest results, the current consensus from Verona Pharma's eight analysts is for revenues of US$308.2m in 2025. This would reflect a sizeable 629% increase on its revenue over the past 12 months. Earnings are expected to improve, with Verona Pharma forecast to report a statutory profit of US$0.14 per share. Before this latest report, the consensus had been expecting revenues of US$264.5m and US$0.029 per share in losses. So we can see that the latest results have sparked a pretty clear upgrade to expectations, with higher revenues expected to lead to profit sooner than previously forecast.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 17% to US$81.25per share. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Verona Pharma at US$93.00 per share, while the most bearish prices it at US$72.00. This is a very narrow spread of estimates, implying either that Verona Pharma is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Verona Pharma's growth to accelerate, with the forecast 6x annualised growth to the end of 2025 ranking favourably alongside historical growth of 12% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.5% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Verona Pharma is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there's been a clear step-change in belief around the business' prospects, with the analysts now expecting Verona Pharma to become profitable next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Verona Pharma going out to 2027, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Verona Pharma that you should be aware of.

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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.