Need To Know: Analysts Are Much More Bullish On Arcellx, Inc. (NASDAQ:ACLX) Revenues

Shareholders in Arcellx, Inc. (NASDAQ:ACLX) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts have sharply increased their revenue numbers, with a view that Arcellx will make substantially more sales than they'd previously expected. Investors have been pretty optimistic on Arcellx too, with the stock up 21% to US$55.21 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

Following the upgrade, the current consensus from Arcellx's eleven analysts is for revenues of US$73m in 2024 which - if met - would reflect a substantial 55% increase on its sales over the past 12 months. Losses are presumed to reduce, shrinking 14% per share from last year to US$2.28. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$66m and losses of US$2.40 per share in 2024. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to next year's revenue estimates, while at the same time reducing their loss estimates.

Check out our latest analysis for Arcellx

It will come as no surprise to learn that the analysts have increased their price target for Arcellx 15% to US$60.09 on the back of these upgrades.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Arcellx's revenue growth is expected to slow, with the forecast 42% annualised growth rate until the end of 2024 being well below the historical 80% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 16% per year. Even after the forecast slowdown in growth, it seems obvious that Arcellx is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing here is that analysts reduced their loss per share estimates for next year, reflecting increased optimism around Arcellx's prospects. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Seeing the dramatic upgrade to next year's forecasts, it might be time to take another look at Arcellx.

Analysts are definitely bullish on Arcellx, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including dilutive stock issuance over the past year. You can learn more, and discover the 2 other flags we've identified, for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.