AVITA Medical, Inc. (NASDAQ:RCEL) Just Reported And Analysts Have Been Lifting Their Price Targets
AVITA Medical, Inc. (NASDAQ:RCEL) shareholders are probably feeling a little disappointed, since its shares fell 2.2% to US$17.10 in the week after its latest annual results. Revenues of US$50m came in 2.3% below estimates, but statutory losses were slightly better than expected, at US$1.46 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for AVITA Medical
Taking into account the latest results, the current consensus from AVITA Medical's ten analysts is for revenues of US$80.4m in 2024. This would reflect a sizeable 60% increase on its revenue over the past 12 months. Losses are supposed to decline, shrinking 15% from last year to US$1.17. Before this earnings announcement, the analysts had been modelling revenues of US$77.7m and losses of US$1.28 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 both revenues and losses per share.
It will come as no surprise to learn thatthe analysts have increased their price target for AVITA Medical 8.9% to US$26.59on the back of these upgrades. 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 AVITA Medical, with the most bullish analyst valuing it at US$39.24 and the most bearish at US$21.07 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting AVITA Medical's growth to accelerate, with the forecast 60% annualised growth to the end of 2024 ranking favourably alongside historical growth of 37% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 17% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect AVITA Medical to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on AVITA Medical. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple AVITA Medical analysts - going out to 2026, and you can see them free on our platform here.
You can also see our analysis of AVITA Medical's Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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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.
