Shareholders might have noticed that Vascular Biogenics Ltd. (NASDAQ:VBLT) filed its yearly result this time last week. The early response was not positive, with shares down 3.1% to US$1.10 in the past week. The statutory results were mixed overall, with revenues of US$562k in line with analyst forecasts, but losses of US$0.54 per share, some 3.3% larger than the analysts were predicting. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the most recent consensus for Vascular Biogenics from three analysts is for revenues of US$600.0k in 2020 which, if met, would be an okay 6.8% increase on its sales over the past 12 months. Per-share losses are expected to explode, reaching US$0.68 per share. Before this earnings announcement, the analysts had been modelling revenues of US$654.0k and losses of US$0.57 per share in 2020. So it's pretty clear the analysts have mixed opinions on Vascular Biogenics after this update; revenues were downgraded and per-share losses expected to increase.
The average price target lifted 29% to US$3.31, clearly signalling that the weaker revenue and EPS outlook are not expected to weigh on the stock over the longer term. 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 Vascular Biogenics at US$5.00 per share, while the most bearish prices it at US$2.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Vascular Biogenics's past performance and to peers in the same industry. One thing stands out from these estimates, which is that Vascular Biogenics is forecast to grow faster in the future than it has in the past, with revenues expected to grow 6.8%. If achieved, this would be a much better result than the 3.9% annual decline over the past year. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 15% next year. So although Vascular Biogenics's revenue growth is expected to improve, it is still expected to grow slower than the industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
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 forecasts for Vascular Biogenics going out to 2021, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 6 warning signs for Vascular Biogenics (2 are potentially serious!) that you should be aware of.
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