US$10.00 - That's What Analysts Think ADC Therapeutics SA (NYSE:ADCT) Is Worth After These Results
There's been a notable change in appetite for ADC Therapeutics SA (NYSE:ADCT) shares in the week since its annual report, with the stock down 16% to US$3.78. It was a pretty bad result overall; while revenues were in line with expectations at US$70m, statutory losses exploded to US$2.94 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Check out our latest analysis for ADC Therapeutics
Taking into account the latest results, the most recent consensus for ADC Therapeutics from four analysts is for revenues of US$82.1m in 2024. If met, it would imply a solid 18% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 28% to US$2.10. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$80.7m and losses of US$1.85 per share in 2024. While this year's revenue estimates held steady, there was also a notable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
Although the analysts are now forecasting higher losses, the average price target rose 8.1% to 9.25, which could indicate that these losses are expected to be "one-off", or are not anticipated to have a longer-term impact on the business. 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 ADC Therapeutics at US$13.00 per share, while the most bearish prices it at US$8.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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 ADC Therapeutics' revenue growth is expected to slow, with the forecast 18% annualised growth rate until the end of 2024 being well below the historical 67% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 17% annually. Factoring in the forecast slowdown in growth, it looks like ADC Therapeutics is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for ADC Therapeutics going out to 2026, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 4 warning signs for ADC Therapeutics (of which 1 is concerning!) you should know about.
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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.
