Adaptimmune Therapeutics plc (NASDAQ:ADAP) missed earnings with its latest yearly results, disappointing overly-optimistic analysts. It looks to have been a weak result overall, as sales of US$1.1m were 42% less than analysts expected. Unsurprisingly, losses were also somewhat larger than analysts expected, at US$1.32 per share. This is an important time for investors, as they can track a company’s performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what analysts’ statutory forecasts suggest is in store for next year.
After the latest results, the five analysts covering Adaptimmune Therapeutics are now predicting revenues of US$25.7m in 2020. If met, this would reflect a major 2191% improvement in sales compared to the last 12 months. Statutory losses are expected to increase substantially, hitting US$1.17. per share. Yet prior to the latest earnings, analysts had been forecasting revenues of US$13.7m and losses of US$1.22 per share in 2020. There has definitely been an improvement in perception after these results, with analysts noticeably increasing both their earnings and revenue estimates.
The consensus price target fell 26%, to US$5.50, suggesting that analysts remain pessimistic on the company, despite the improved earnings and revenue outlook. 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. There are some variant perceptions on Adaptimmune Therapeutics, with the most bullish analyst valuing it at US$8.00 and the most bearish at US$3.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
In addition, we can look to Adaptimmune Therapeutics’s past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. It’s clear from the latest estimates that Adaptimmune Therapeutics’s rate of growth is expected to accelerate meaningfully, with forecast 2191% revenue growth noticeably faster than its historical growth of 27%p.a. over the past five years. Compare this with other companies in the same market, which are forecast to grow their revenue 16% next year. Factoring in the forecast acceleration in revenue, it’s pretty clear that Adaptimmune Therapeutics is expected to grow much faster than its market.
The Bottom Line
The most important thing to note from these estimates is that the consensus increased its forecast losses next year, suggesting all may not be well at Adaptimmune Therapeutics. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by the latest results, leading to a lower estimate of Adaptimmune Therapeutics’s future valuation.
With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. We have estimates – from multiple Adaptimmune Therapeutics analysts – going out to 2024, and you can see them free on our platform here.
We also provide an overview of the Adaptimmune Therapeutics Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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