Arvinas, Inc. (NASDAQ:ARVN) Just Reported Yearly Earnings: Have Analysts Changed Their Mind On The Stock?
It's shaping up to be a tough period for Arvinas, Inc. (NASDAQ:ARVN), which a week ago released some disappointing full-year results that could have a notable impact on how the market views the stock. It was not a great statutory result, with revenues coming in 54% lower than the analysts predicted. Unsurprisingly, earnings also fell seriously short of forecasts, turning into a per-share loss of US$6.62. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Arvinas after the latest results.
See our latest analysis for Arvinas
Taking into account the latest results, the current consensus from Arvinas' 17 analysts is for revenues of US$144.2m in 2024. This would reflect a sizeable 84% increase on its revenue over the past 12 months. Losses are expected to increase slightly, to US$5.62 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$145.8m and losses of US$6.24 per share in 2024. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers were unchanged.
The average price target held steady at US$69.00, seeming to indicate that business is performing in line with expectations. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Arvinas, with the most bullish analyst valuing it at US$110 and the most bearish at US$20.00 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
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 Arvinas' growth to accelerate, with the forecast 84% annualised growth to the end of 2024 ranking favourably alongside historical growth of 41% 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 9.0% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Arvinas is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$69.00, 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. At Simply Wall St, we have a full range of analyst estimates for Arvinas going out to 2026, and you can see them free on our platform here..
We don't want to rain on the parade too much, but we did also find 3 warning signs for Arvinas that you need to be mindful of.
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.
