BioArctic AB (publ) (STO:BIOA B) Consensus Forecasts Have Become A Little Darker Since Its Latest Report

A week ago, BioArctic AB (publ) (STO:BIOA B) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. Results overall were credible, with revenues arriving 2.6% better than analyst forecasts at kr50m. Higher revenues also resulted in lower statutory losses, which were kr0.77 per share, some 2.6% smaller than the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for BioArctic

Following the recent earnings report, the consensus from six analysts covering BioArctic is for revenues of kr277.7m in 2024. This implies a not inconsiderable 8.0% decline in revenue compared to the last 12 months. Per-share losses are supposed to see a sharp uptick, reaching kr1.13. Yet prior to the latest earnings, the analysts had been forecasting revenues of kr446.0m and losses of kr0.74 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.

The consensus price target fell 9.3% to kr291, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values BioArctic at kr340 per share, while the most bearish prices it at kr270. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 15% by the end of 2024. This indicates a significant reduction from annual growth of 3.4% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 18% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - BioArctic is expected to lag 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 BioArctic. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that 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 BioArctic going out to 2026, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with BioArctic , and understanding this should be part of your investment process.

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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.