Surface Oncology, Inc. (NASDAQ:SURF) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year’s forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.
Following the upgrade, the most recent consensus for Surface Oncology from its three analysts is for revenues of US$39m in 2020 which, if met, would be a major 151% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 49% to US$1.01. Yet before this consensus update, 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.
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. The analysts are definitely expecting Surface Oncology’s growth to accelerate, with the forecast 151% growth ranking favourably alongside historical growth of 13% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 24% next 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 highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Surface Oncology is moving incrementally towards profitability. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. The clear improvement in sentiment should be enough to get most shareholders feeling more optimistic about Surface Oncology’s future.
Still, the long-term prospects of the business are much more relevant than next year’s earnings. 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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