Need To Know: Analysts Just Made A Substantial Cut To Their Dynavax Technologies Corporation (NASDAQ:DVAX) Estimates
One thing we could say about the analysts on Dynavax Technologies Corporation (NASDAQ:DVAX) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.
Following the latest downgrade, the five analysts covering Dynavax Technologies provided consensus estimates of US$181m revenue in 2023, which would reflect a concerning 75% decline on its sales over the past 12 months. After this downgrade, the company is anticipated to report a loss of US$0.50 in 2023, a sharp decline from a profit over the last year. However, before this estimates update, the consensus had been expecting revenues of US$295m and US$0.45 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.
View our latest analysis for Dynavax Technologies
There was no major change to the consensus price target of US$23.20, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Dynavax Technologies at US$27.00 per share, while the most bearish prices it at US$18.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 75% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 77% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 14% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Dynavax Technologies is expected to lag the wider industry.
The Bottom Line
The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Dynavax Technologies. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Dynavax Technologies.
As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Dynavax Technologies' financials, such as dilutive stock issuance over the past year. For more information, you can click here to discover this and the 1 other warning sign we've identified.
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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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