Adaptimmune Therapeutics plc (NASDAQ:ADAP) just released its latest yearly report and things are not looking great. It looks to have been a weak result overall, as sales of US$1.1m were 42% less than analysts expected. Unsurprisingly, losses were also somewhat larger than analysts expected, at US$1.32 per share. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts 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 analysts have changed their mind on Adaptimmune Therapeutics after the latest results.
Following the latest results, Adaptimmune Therapeutics's five analysts are now forecasting revenues of US$25.7m in 2020. This would be a sizeable 2191% improvement in sales compared to the last 12 months. Per-share statutory losses are expected to see a sharp uptick, reaching US$1.17. Before this earnings announcement, analysts had been forecasting revenues of US$13.7m and losses of US$1.22 per share in 2020. There has definitely been an improvement in perception after these results, with analysts noticeably increasing both their earnings and revenue estimates.
Yet despite these upgrades, analysts cut their price target 26% to US$5.50, implicitly signalling that the ongoing losses are likely to weigh negatively on Adaptimmune Therapeutics's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Adaptimmune Therapeutics, with the most bullish analyst valuing it at US$8.00 and the most bearish at US$3.00 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.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Adaptimmune Therapeutics's performance in recent years. It's clear from the latest estimates that Adaptimmune Therapeutics's rate of growth is expected to accelerate meaningfully, with forecast 2191% revenue growth noticeably faster than its historical growth of 27%p.a. 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 16% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Adaptimmune Therapeutics is expected to grow much faster than its market.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for next year. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by the latest results, leading to a lower estimate of Adaptimmune Therapeutics's future valuation.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Adaptimmune Therapeutics going out to 2024, and you can see them free on our platform here.
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