Surface Oncology, Inc. (NASDAQ:SURF) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this 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.
After this upgrade, Surface Oncology's three analysts are now forecasting revenues of US$39m in 2020. This would be a substantial 151% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 49% to US$1.01. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$24m and losses of US$1.35 per share in 2020. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Surface Oncology's past performance and to peers in the same industry. It's clear from the latest estimates that Surface Oncology's rate of growth is expected to accelerate meaningfully, with the forecast 151% revenue growth noticeably faster than its historical growth of 13% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 24% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Surface Oncology is expected to grow much faster than its industry.
The Bottom Line
The most important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around Surface Oncology'sprospects. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. The clear improvement in sentiment should be enough to get most shareholders feeling more optimistic about Surface Oncology's future.
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 Surface Oncology going out to 2024, and you can see them free on our platform here..
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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