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Analysts Just Made A Decent Upgrade To Their Dynavax Technologies Corporation (NASDAQ:DVAX) Forecasts

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  • DVAX
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Celebrations may be in order for Dynavax Technologies Corporation (NASDAQ:DVAX) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. The market may be pricing in some blue sky too, with the share price gaining 23% to US$11.58 in the last 7 days. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.

After the upgrade, the five analysts covering Dynavax Technologies are now predicting revenues of US$363m in 2021. If met, this would reflect a major 115% improvement in sales compared to the last 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting US$0.57 in per-share earnings. Prior to this update, the analysts had been forecasting revenues of US$322m and earnings per share (EPS) of US$0.52 in 2021. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

See our latest analysis for Dynavax Technologies

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earnings-and-revenue-growth

With these upgrades, we're not surprised to see that the analysts have lifted their price target 8.5% to US$20.25 per share. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Dynavax Technologies at US$22.00 per share, while the most bearish prices it at US$19.00. This is a very narrow spread of estimates, implying either that Dynavax Technologies is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Dynavax Technologies' growth to accelerate, with the forecast 4x annualised growth to the end of 2021 ranking favourably alongside historical growth of 67% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.2% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Dynavax Technologies is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Dynavax Technologies.

Analysts are definitely bullish on Dynavax Technologies, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including dilutive stock issuance over the past year. You can learn more, and discover the 2 other warning signs we've identified, for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.