Anika Therapeutics, Inc. (NASDAQ:ANIK)
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The Company develops, manufactures and commercializes therapeutic products for tissue protection, healing and repair.
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The Company develops, manufactures and commercializes therapeutic products for tissue protection, healing and repair.
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New products second half. P/E looks high. Any room to make some money?
This year's earnings trade at a 29 p/e for .51 est. With a ttm p/e of 36. So lets say they hit the numbers and get .51. That should imply an $18 stock based on the ttm p/e of 36. It woud seem 36 is pretty high and I would bet the TTM goes down more than up. So 20% upside doesn't give much room for comfort if we look at backwards p/e.
New things are coming so maybe forward p/e is the better metric. Say they hit .51 and the following years est. is .79 according to the analysts right now. Based on the current forward p/e of 29 (off of the .51 est) gets you a $22 stock on .79 after they hit the .51 numbers. So there you have it - this stock should trade between 18 and 22 by the end of the fiscal year. More likely 22. That's assuming the new products will really generate the growth that this p/e imply.
For the risk assumed about the new products, investors can expect a tiddy 46% profit if it paysoff.
Patience may payoff. it should work down towards $16-17, close to 3rd qtr. Right now, the Elevess franchise is not going to add substantially to the bottom line. They're expecting 1st to 2nd qtr of 2008 before they see any significant addition to the bottom line. The bigger problem is the loss of revenue from Turkey. Though they said in the conference call that shipments have resumed, the revenue generation will not equal previous years. So, if Elevess will not add much, & Turkey becoming a lesser revenue generator, then the U.S. sales have to continue to exceed present qtr growth rate in order for Anika to keep pace with last year's revenue.
The numbers sadly point to flat performance for the rest of the year! At 42 P/E, any purchase would be paying a heavy price for U.S growth, which @ mid year could not replace the impact of 1 foreign market. Also, the 20% pop in stock price over 3 days is primarily on hype of the success of the Elevess product. It happened in the fall of last year & then the stock dropped back down to $12-13 range for a couple of months. Plus the single injection "next generation" Orthovisc seems mostly for foreign countries & the trial for shoulder osteoarthritis is only 25% filled in terms of patients.
This year probably has seen the peak of the stock price, as of the end of July. It should start working down by the end of August into September, trading within a 25% range.