Arbutus Biopharma Corporation (NASDAQ:ABUS) Consensus Forecasts Have Become A Little Darker Since Its Latest Report
Arbutus Biopharma Corporation (NASDAQ:ABUS) shareholders are probably feeling a little disappointed, since its shares fell 4.5% to US$2.79 in the week after its latest annual results. Revenues of US$18m fell short of estimates by 15%, but statutory losses were in line with expectations, at US$0.45 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
See our latest analysis for Arbutus Biopharma
Following the recent earnings report, the consensus from three analysts covering Arbutus Biopharma is for revenues of US$8.83m in 2024. This implies a painful 51% decline in revenue compared to the last 12 months. Losses are expected to increase slightly, to US$0.45 per share. Before this earnings announcement, the analysts had been modelling revenues of US$14.6m and losses of US$0.43 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.
The average price target was broadly unchanged at US$4.39, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Arbutus Biopharma at US$5.01 per share, while the most bearish prices it at US$3.95. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
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. We would highlight that revenue is expected to reverse, with a forecast 51% annualised decline to the end of 2024. That is a notable change from historical growth of 38% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 18% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Arbutus Biopharma is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at US$4.39, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Arbutus Biopharma analysts - going out to 2026, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 3 warning signs for Arbutus Biopharma (1 is a bit concerning!) that you should be aware of.
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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.
