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Biohaven Pharmaceutical Holding Company Ltd. (NYSE:BHVN) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts have sharply increased their revenue numbers, with a view that Biohaven Pharmaceutical Holding will make substantially more sales than they'd previously expected. Biohaven Pharmaceutical Holding has also found favour with investors, with the stock up a worthy 15% to US$115 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.
After this upgrade, Biohaven Pharmaceutical Holding's twelve analysts are now forecasting revenues of US$301m in 2021. This would be a substantial 183% improvement in sales compared to the last 12 months. Losses are presumed to reduce, shrinking 11% from last year to US$12.72. However, before this estimates update, the consensus had been expecting revenues of US$250m and US$13.61 per share in losses. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to this year's revenue estimates, while at the same time reducing their loss estimates.
The consensus price target rose 13% to US$114, with the analysts encouraged by the higher revenue and lower forecast losses for this year. 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. There are some variant perceptions on Biohaven Pharmaceutical Holding, with the most bullish analyst valuing it at US$145 and the most bearish at US$69.00 per share. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the 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. It's pretty clear that there is an expectation that Biohaven Pharmaceutical Holding's revenue growth will slow down substantially, with revenues to the end of 2021 expected to display 3x growth on an annualised basis. This is compared to a historical growth rate of 9,135% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 13% annually. Even after the forecast slowdown in growth, it seems obvious that Biohaven Pharmaceutical Holding is also expected to grow faster than the wider industry.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Biohaven Pharmaceutical Holding is moving incrementally towards profitability. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Biohaven Pharmaceutical Holding.
Analysts are definitely bullish on Biohaven Pharmaceutical Holding, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including dilutive stock issuance over the past year. For more information, you can click through to our platform to learn more about this and the 3 other risks we've identified .
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks 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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