Alkermes plc Just Beat EPS By 12%: Here's What Analysts Think Will Happen Next

Alkermes plc (NASDAQ: ALKS) reported adjusted earnings from continuing operations of $1.04 per share for the fourth quarter of 2024, surpassing the Zacks Consensus Estimate of $0.81. The company had reported adjusted earnings of $0.48 per share in the year-ago quarter. Alkermes' total revenues of $430 million in the fourth quarter increased 13.9% from the year-ago quarter's level, driven by higher sales of its proprietary products. The top line also beat the Zacks Consensus Estimate of $379 million. Shares of Alkermes were up 4.8% on February 12, 2025, owing to the better-than-expected fourth-quarter results.

Alkermes derives revenues from the net sales of its proprietary products — Vivitrol (alcohol and opioid dependence), Aristada (schizophrenia), and Lybalvi (schizophrenia and bipolar I disorder) — and manufacturing and/or royalty revenues on net sales of products commercialized by its partners. Sales of the proprietary products portfolio grew 27.1% year over year during the fourth quarter. Sales of the proprietary drug Vivitrol increased 31% year over year to $134.1 million, beating the Zacks Consensus Estimate of $108 million and the model estimate of $100.8 million. Aristada sales increased 16% year over year to $96.6 million, beating the Zacks Consensus Estimate of $93 million but missing the model estimate of $98.2 million. Lybalvi generated sales of $77 million, up almost 37% year over year, missing the Zacks Consensus Estimate of $79 million and the model estimate of $78.8 million. Total manufacturing and royalty revenues decreased around 9.7% year over year to $122.3 million.

Research and development expenses totaled $58.2 million, down almost 21.2% year over year. Selling, general and administrative expenses totaled $147 million, down almost 13.4% year over year. As of December 31, 2024, Alkermes had cash and cash equivalents of $824.8 million compared with $927.8 million as of September 30, 2024.

For the full year 2024, Alkermes generated revenues of $1.56 billion, a decrease of 6.4% compared to the previous year's $1.66 billion. Earnings were $372.1 million, down 28% from $518.5 million in 2023. Profit margin was 24%, down from 31% in 2023. EPS was $2.25, down from $3.12 in 2023.

Analysts' revised revenue and EPS forecasts for 2025 reflect a mixed level of confidence in Alkermes' future performance. The consensus revenue forecast for 2025 is $1.40 billion, which represents a 10% decline compared to the last year's performance. This decline suggests that analysts expect a slowdown in Alkermes' revenue growth, possibly due to market conditions, competition, or internal challenges. The consensus EPS forecast for 2025 is $1.16, which is a 49% decrease from the previous year. This significant decrease indicates that analysts anticipate a substantial drop in Alkermes' earnings per share, which could be due to higher expenses, lower margins, or other factors affecting profitability.

The wide range of price targets for Alkermes, from $21.00 to $46.00 per share, is primarily driven by analysts' diverse perceptions and expectations regarding the company's future performance, particularly the potential of its lead development candidate, ALKS 2680. Analysts who are more optimistic about the company's ability to successfully commercialize its products and maintain profitability may assign a higher valuation, while those with a more cautious outlook may assign a lower valuation, reflecting concerns about competition, market dynamics, or other risks.

In conclusion, Alkermes' strong fourth-quarter and full-year 2024 results, driven by commercial execution and pipeline progress, have led to a 12% beat in EPS. However, analysts' revised revenue and EPS forecasts for 2025 reflect a mixed level of confidence in the company's future performance, with a wide range of price targets indicating differing opinions on the company's prospects. As Alkermes awaits key data readouts for its lead development candidate, ALKS 2680, investors will closely monitor the company's progress and the market's reaction to its future performance.