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BridgeBio Pharma, Inc. (NASDAQ:BBIO) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline.
After the upgrade, the nine analysts covering BridgeBio Pharma are now predicting revenues of US$86m in 2021. If met, this would reflect a huge 36% improvement in sales compared to the last 12 months. Losses are forecast to hold steady at around US$3.81. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$69m and losses of US$4.09 per share in 2021. 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.
Despite these upgrades, the analysts have not made any major changes to their price target of US$79.89, implying that their latest estimates don't have a long term impact on what they think the stock is worth. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values BridgeBio Pharma at US$91.00 per share, while the most bearish prices it at US$66.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await BridgeBio Pharma shareholders.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the BridgeBio Pharma's past performance and to peers in the same industry. It's clear from the latest estimates that BridgeBio Pharma's rate of growth is expected to accelerate meaningfully, with the forecast 86% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 55% over the past year. Compare this with other companies in the same industry, which are forecast to grow their revenue 10% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that BridgeBio Pharma is expected to grow much faster than its industry.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting BridgeBio Pharma 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. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at BridgeBio Pharma.
Analysts are clearly in love with BridgeBio Pharma at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as dilutive stock issuance over the past year. You can learn more, and discover the 2 other warning signs we've identified, for 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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