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US$260 - That's What Analysts Think BeiGene, Ltd. (NASDAQ:BGNE) Is Worth After These Results

Simply Wall St
·3 min read

The third-quarter results for BeiGene, Ltd. (NASDAQ:BGNE) were released last week, making it a good time to revisit its performance. Results overall were mixed; even though revenues of US$91m beat expectations by 10%, statutory losses were US$4.81 per share, 14% larger than what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for BeiGene

earnings-and-revenue-growth
earnings-and-revenue-growth

Taking into account the latest results, the current consensus from BeiGene's 19 analysts is for revenues of US$720.6m in 2021, which would reflect a huge 171% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 43% to US$11.33. Before this latest report, the consensus had been expecting revenues of US$716.0m and US$11.48 per share in losses.

The average price target fell 7.5% to US$260, with the ongoing losses seemingly a concern for the analysts, despite the lack of real change to the earnings forecasts. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic BeiGene analyst has a price target of US$347 per share, while the most pessimistic values it at US$158. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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 BeiGene's rate of growth is expected to accelerate meaningfully, with the forecast 171% revenue growth noticeably faster than its historical growth of 48%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 20% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect BeiGene to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on BeiGene. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple BeiGene analysts - going out to 2024, and you can see them free on our platform here.

Before you take the next step you should know about the 4 warning signs for BeiGene (1 doesn't sit too well with us!) that we have uncovered.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.