Analysts Just Made A Significant Upgrade To Their Roivant Sciences Ltd. (NASDAQ:ROIV) Forecasts
Roivant Sciences Ltd. (NASDAQ:ROIV) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. 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.
Following the upgrade, the most recent consensus for Roivant Sciences from its nine analysts is for revenues of US$173m in 2024 which, if met, would be a substantial 182% increase on its sales over the past 12 months. Losses are presumed to reduce, shrinking 18% from last year to US$1.22. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$155m and losses of US$1.37 per share in 2024. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to this year's revenue estimates, while at the same time reducing their loss estimates.
Check out our latest analysis for Roivant Sciences
It will come as no surprise to learn that the analysts have increased their price target for Roivant Sciences 10% to US$15.00 on the back of these upgrades. 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 Roivant Sciences at US$23.00 per share, while the most bearish prices it at US$11.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. For example, we noticed that Roivant Sciences' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 182% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 2.5% a year over the past three years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 16% annually. So it looks like Roivant Sciences is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around Roivant Sciences' prospects. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Roivant Sciences.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Roivant Sciences going out to 2026, and you can see them 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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