Industry Analysts Just Made A Meaningful Upgrade To Their G1 Therapeutics, Inc. (NASDAQ:GTHX) Revenue Forecasts
G1 Therapeutics, Inc. (NASDAQ:GTHX) 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 G1 Therapeutics will make substantially more sales than they'd previously expected.
Following the latest upgrade, the current consensus, from the eight analysts covering G1 Therapeutics, is for revenues of US$36m in 2021, which would reflect a concerning 44% reduction in G1 Therapeutics' sales over the past 12 months. Per-share losses are expected to explode, reaching US$3.51 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$32m and losses of US$3.51 per share in 2021. So there's definitely been a change in sentiment in this update, with the analysts upgrading this year's revenue estimates, while at the same time holding losses per share steady.
See our latest analysis for G1 Therapeutics
Analysts trimmed their valuations, with the average price target falling 5.5% to US$51.71, with the ongoing losses clearly weighing on sentiment despite the upgraded revenue estimates. 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. The most optimistic G1 Therapeutics analyst has a price target of US$78.00 per share, while the most pessimistic values it at US$29.00. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 68% by the end of 2021. This indicates a significant reduction from annual growth of 2,889% over the last year. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 10% per year. It's pretty clear that G1 Therapeutics' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting G1 Therapeutics is moving incrementally towards profitability. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of G1 Therapeutics' future valuation. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at G1 Therapeutics.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple G1 Therapeutics analysts - going out to 2023, and you can see them free on our platform here.
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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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