Analysts' Revenue Estimates For Biodesix, Inc. (NASDAQ:BDSX) Are Surging Higher

Biodesix, Inc. (NASDAQ:BDSX) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts have sharply increased their revenue numbers, with a view that Biodesix will make substantially more sales than they'd previously expected.

Following the latest upgrade, the current consensus, from the four analysts covering Biodesix, is for revenues of US$39m in 2022, which would reflect a painful 48% reduction in Biodesix's sales over the past 12 months. Losses are supposed to balloon 34% to US$1.47 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$35m and losses of US$1.61 per share in 2022. 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.

See our latest analysis for Biodesix

The consensus price target fell 19%, to US$11.33, suggesting that the analysts remain pessimistic on the company, despite the improved earnings and revenue outlook. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Biodesix, with the most bullish analyst valuing it at US$18.00 and the most bearish at US$7.00 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.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 48% by the end of 2022. This indicates a significant reduction from annual growth of 57% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.4% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Biodesix is expected to lag the wider industry.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Biodesix is moving incrementally towards profitability. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Biodesix's future valuation. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Biodesix.

Analysts are clearly in love with Biodesix at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as a short cash runway. For more information, you can click through to our platform to learn more about this and the 4 other warning signs 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 upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.