Analysts Just Made A Major Revision To Their Vir Biotechnology, Inc. (NASDAQ:VIR) Revenue Forecasts
Market forces rained on the parade of Vir Biotechnology, Inc. (NASDAQ:VIR) shareholders today, when the analysts downgraded their forecasts for this year. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.
After the downgrade, the consensus from Vir Biotechnology's eight analysts is for revenues of US$76m in 2023, which would reflect a concerning 84% decline in sales compared to the last year of performance. Per-share losses are expected to explode, reaching US$4.72 per share. However, before this estimates update, the consensus had been expecting revenues of US$121m and US$4.60 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.
View our latest analysis for Vir Biotechnology
The consensus price target was broadly unchanged at US$34.50, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Vir Biotechnology's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 98% by the end of 2023. This indicates a significant reduction from annual growth of 59% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 17% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Vir Biotechnology is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Vir Biotechnology's revenues are expected to grow slower than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Vir Biotechnology after today.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Vir Biotechnology analysts - going out to 2025, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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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.
