The analysts covering DBV Technologies S.A. (EPA:DBV) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
Following the downgrade, the most recent consensus for DBV Technologies from its eight analysts is for revenues of €14m in 2020 which, if met, would be a sizeable 46% increase on its sales over the past 12 months. Losses are presumed to reduce, shrinking 12% from last year to €3.64. Yet prior to the latest estimates, the analysts had been forecasting revenues of €17m and losses of €3.63 per share in 2020. So there’s definitely been a change in sentiment in this update, with the analysts administering a substantial haircut to this year’s revenue estimates, while at the same time holding losses per share steady.
There was no real change to the consensus price target of €18.27, suggesting that the revisions to revenue estimates are not expected to have a long-term impact on DBV Technologies’ valuation. 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. The most optimistic DBV Technologies analyst has a price target of €30.70 per share, while the most pessimistic values it at €8.70. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how think this business will perform. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the DBV Technologies’ past performance and to peers in the same industry. The analysts are definitely expecting DBV Technologies’ growth to accelerate, with the forecast 46% growth ranking favourably alongside historical growth of 16% per annum 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 29% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect DBV Technologies to grow faster than the wider industry.
The Bottom Line
Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Given the stark change in sentiment, we’d understand if investors became more cautious on DBV Technologies after today.
As you can see, the analysts clearly aren’t bullish, and there might be good reason for that. We’ve identified some potential issues with DBV Technologies’ financials, such as major dilution from new stock issuance in the past year. For more information, you can click here to discover this and the 1 other flag we’ve identified.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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