News Flash: Analysts Just Made A Huge Upgrade To Their Adaptimmune Therapeutics plc (NASDAQ:ADAP) Forecasts
Adaptimmune Therapeutics plc (NASDAQ:ADAP) 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 analysts now much more optimistic on its sales pipeline.
After the upgrade, the seven analysts covering Adaptimmune Therapeutics are now predicting revenues of US$51m in 2023. If met, this would reflect a huge 86% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 30% to US$0.71. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$31m and losses of US$0.71 per share in 2023. 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 Adaptimmune Therapeutics
There were no major changes to the US$5.86 consensus price target despite the higher revenue estimates, with the analysts seeming to believe that ongoing losses have a larger impact on the valuation than growing sales. 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 Adaptimmune Therapeutics at US$10.00 per share, while the most bearish prices it at US$2.00. With such a wide range in price targets, the analysts are almost certainly betting on widely diverse outcomes for the underlying business. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on 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. One thing stands out from these estimates, which is that Adaptimmune Therapeutics is forecast to grow faster in the future than it has in the past, with revenues expected to display 86% annualised growth until the end of 2023. If achieved, this would be a much better result than the 41% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 14% annually. So it looks like Adaptimmune Therapeutics is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Adaptimmune Therapeutics 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 Adaptimmune Therapeutics.
Analysts are definitely bullish on Adaptimmune Therapeutics, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including a short cash runway. For more information, you can click through to our platform to learn more about this and the 4 other concerns 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.
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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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