Agenus Inc. (NASDAQ:AGEN) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's statutory forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.
Following the upgrade, the most recent consensus for Agenus from its five analysts is for revenues of US$197m in 2024 which, if met, would be a sizeable 96% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 25% to US$0.54. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$110m and losses of US$0.69 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.
Yet despite these upgrades, the analysts cut their price target 17% to US$6.67, implicitly signalling that the ongoing losses are likely to weigh negatively on Agenus' valuation.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Agenus' rate of growth is expected to accelerate meaningfully, with the forecast 71% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 13% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 15% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Agenus is expected to grow much faster than its industry.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses next year, perhaps suggesting Agenus is moving incrementally towards profitability. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. A lower price target is not intuitively what we would expect from a company whose business prospects are improving - at least judging by these forecasts - but if the underlying fundamentals are strong, Agenus could be one for the watch list.
These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 5 potential flags with Agenus, including dilutive stock issuance over the past year. You can learn more, and discover the 4 other flags 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.
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