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Forecast: Analysts Think MacroGenics, Inc.'s (NASDAQ:MGNX) Business Prospects Have Improved Drastically

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  • MGNX

MacroGenics, Inc. (NASDAQ:MGNX) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance. The market may be pricing in some blue sky too, with the share price gaining 21% to US$24.47 in the last 7 days. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

Following the upgrade, the current consensus from MacroGenics' eight analysts is for revenues of US$164m in 2021 which - if met - would reflect a sizeable 56% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 39% to US$1.50. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$148m and losses of US$2.01 per share in 2021. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

Check out our latest analysis for MacroGenics

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Despite these upgrades, the analysts have not made any major changes to their price target of US$31.10, implying that their latest estimates don't have a long term impact on what they think the stock is worth. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values MacroGenics at US$39.00 per share, while the most bearish prices it at US$14.00. 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.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. For example, we noticed that MacroGenics' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 56% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 0.8% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 18% per year. So it looks like MacroGenics is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting MacroGenics is moving incrementally towards profitability. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at MacroGenics.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple MacroGenics analysts - going out to 2025, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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