There's been a major selloff in Clovis Oncology, Inc. (NASDAQ:CLVS) shares in the week since it released its annual report, with the stock down 24% to US$7.99. Sales hit US$143m in line with forecasts, although the company reported a statutory loss per share of US$7.43 that was somewhat smaller than analysts expected. 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. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.
Taking into account the latest results, the most recent consensus for Clovis Oncology from nine analysts is for revenues of US$193.8m in 2020, which is a huge 36% increase on its sales over the past 12 months. Statutory losses are forecast to balloon 36% to US$4.76 per share. Yet prior to the latest earnings, analysts had been forecasting revenues of US$196.2m and losses of US$4.77 per share in 2020. Although the revenue estimates have not really changed, we can see there's been a earnings per share expectations, suggesting that analysts have become more bullish after the latest result.
As a result there was no major change to the consensus price target of US$13.81, implying that the business is trading roughly in line with analyst expectations despite ongoing losses. 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 Clovis Oncology, with the most bullish analyst valuing it at US$32.00 and the most bearish at US$3.00 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the Clovis Oncology's past performance and to peers in the same market. It's pretty clear that analysts expect Clovis Oncology's revenue growth will slow down substantially, with revenues next year expected to grow 36%, compared to a historical growth rate of 51% over the past five years. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 17% next year. So it's pretty clear that, while Clovis Oncology's revenue growth is expected to slow, it's still expected to grow faster than the market itself.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Clovis Oncology going out to 2024, and you can see them free on our platform here..
It might also be worth considering whether Clovis Oncology's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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