It's been a good week for CytomX Therapeutics, Inc. (NASDAQ:CTMX) shareholders, because the company has just released its latest third-quarter results, and the shares gained 6.0% to US$7.02. It looks like the results were pretty good overall. While revenues of US$18m were in line with analyst predictions, statutory losses were much smaller than expected, with CytomX Therapeutics losing US$0.32 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the consensus from CytomX Therapeutics' eight analysts is for revenues of US$71.5m in 2021, which would reflect an uneasy 16% decline in sales compared to the last year of performance. Per-share losses are expected to explode, reaching US$2.00 per share. Before this earnings announcement, the analysts had been modelling revenues of US$71.2m and losses of US$1.88 per share in 2021. So it's pretty clear consensus is mixed on CytomX Therapeutics after the new consensus numbers; while the analysts held their revenue numbers steady, they also administered a per-share loss expectations.
As a result, there was no major change to the consensus price target of US$12.56, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. 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 CytomX Therapeutics at US$18.00 per share, while the most bearish prices it at US$8.50. 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.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast revenue decline of 16%, a significant reduction from annual growth of 36% 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 20% annually for the foreseeable future. It's pretty clear that CytomX Therapeutics' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at CytomX Therapeutics. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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 CytomX Therapeutics going out to 2024, and you can see them free on our platform here..
Before you take the next step you should know about the 2 warning signs for CytomX Therapeutics (1 is a bit unpleasant!) that we have uncovered.
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.
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