U.S. Markets open in 5 hrs 33 mins
  • S&P Futures

    3,664.00
    -3.25 (-0.09%)
     
  • Dow Futures

    29,839.00
    -29.00 (-0.10%)
     
  • Nasdaq Futures

    12,473.50
    +19.25 (+0.15%)
     
  • Russell 2000 Futures

    1,835.20
    -2.30 (-0.13%)
     
  • Crude Oil

    45.46
    +0.18 (+0.40%)
     
  • Gold

    1,842.50
    +12.30 (+0.67%)
     
  • Silver

    24.25
    +0.17 (+0.71%)
     
  • EUR/USD

    1.2123
    +0.0007 (+0.0606%)
     
  • 10-Yr Bond

    0.9480
    0.0000 (0.00%)
     
  • Vix

    21.10
    +0.33 (+1.59%)
     
  • GBP/USD

    1.3407
    +0.0031 (+0.2346%)
     
  • USD/JPY

    104.2720
    -0.1520 (-0.1456%)
     
  • BTC-USD

    19,365.07
    +415.82 (+2.19%)
     
  • CMC Crypto 200

    379.60
    +14.68 (+4.02%)
     
  • FTSE 100

    6,473.50
    +10.11 (+0.16%)
     
  • Nikkei 225

    26,809.37
    +8.39 (+0.03%)
     

AVITA Therapeutics, Inc. (ASX:AVH) First-Quarter Results: Here's What Analysts Are Forecasting For This Year

Simply Wall St
·4 min read

AVITA Therapeutics, Inc. (ASX:AVH) came out with its quarterly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. The results were positive, with revenue coming in at US$5.0m, beating analyst expectations by 6.9%. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for AVITA Therapeutics

earnings-and-revenue-growth
earnings-and-revenue-growth

Taking into account the latest results, the current consensus from AVITA Therapeutics' six analysts is for revenues of US$21.7m in 2021, which would reflect a substantial 35% increase on its sales over the past 12 months. Per-share losses are expected to explode, reaching US$1.00 per share. Before this latest report, the consensus had been expecting revenues of US$20.0m and US$0.91 per share in losses. While this year's revenue estimates increased, there was also a loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

The consensus price target stayed unchanged at AU$12.50, seeming to suggest that higher forecast losses are not expected to have a long term impact on the valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on AVITA Therapeutics, with the most bullish analyst valuing it at AU$18.00 and the most bearish at AU$8.00 per share. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the AVITA Therapeutics' past performance and to peers in the same industry. We would highlight that AVITA Therapeutics' revenue growth is expected to slow, with forecast 35% increase next year well below the historical 68%p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 10% next year. So it's pretty clear that, while AVITA Therapeutics' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at AVITA Therapeutics. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at US$12.50, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple AVITA Therapeutics analysts - going out to 2025, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with AVITA Therapeutics , and understanding these should be part of your investment process.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.