Ascletis Pharma Inc.'s (HKG:1672) Sole Analyst Just Made A Dazzling Upgrade To Their Forecasts

Celebrations may be in order for Ascletis Pharma Inc. (HKG:1672) shareholders, with the covering analyst delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.

After this upgrade, Ascletis Pharma's single analyst is now forecasting revenues of CN¥120m in 2022. This would be a huge 56% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 34% to CN¥0.12. Yet prior to the latest estimates, the analyst had been forecasting revenues of CN¥78m and losses of CN¥0.28 per share in 2022. So there's been quite a change-up of views after the recent consensus updates, with the analyst making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

See our latest analysis for Ascletis Pharma

There was no major change to the consensus price target of CN¥2.06, perhaps suggesting that the analyst remain concerned about ongoing losses 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. The most optimistic Ascletis Pharma analyst has a price target of CN¥2.60 per share, while the most pessimistic values it at CN¥2.45. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Ascletis Pharma's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 56% growth to the end of 2022 on an annualised basis. That is well above its historical decline of 8.0% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 24% annually. Not only are Ascletis Pharma's revenues expected to improve, it seems that the analyst is also expecting it to grow faster than the wider industry.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Ascletis Pharma is moving incrementally towards profitability. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Ascletis Pharma could be a good candidate for more research.

Better yet, Ascletis Pharma is expected to break-even soon - within the next few years - according to analyst forecasts, which would be a momentous event for shareholders. For more information, you can click through to our free platform to learn more about these forecasts.

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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.