Vir Biotechnology, Inc. (NASDAQ:VIR) came out with its quarterly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues came in 95% better than analyst models expected, at US$5.7m, although statutory losses ballooned 47% to US$0.71, which is much worse than what was 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the most recent consensus for Vir Biotechnology from four analysts is for revenues of US$12.9m in 2020 which, if met, would be a sizeable 27% increase on its sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 39% to US$2.46. Before this latest report, the consensus had been expecting revenues of US$13.1m and US$2.03 per share in losses. While this year's revenue estimates held steady, there was also a loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
As a result, there was no major change to the consensus price target of US$32.00, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Vir Biotechnology at US$44.00 per share, while the most bearish prices it at US$17.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Vir Biotechnology's past performance and to peers in the same industry. For example, we noticed that Vir Biotechnology's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 27%, well above its historical decline of 15% a year over the past year. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 24% next year. So it looks like Vir Biotechnology is expected to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Vir Biotechnology. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$32.00, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Vir Biotechnology. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Vir Biotechnology going out to 2024, and you can see them free on our platform here..
It is also worth noting that we have found 3 warning signs for Vir Biotechnology (1 is concerning!) that you need to take into consideration.
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