Analysts Are More Bearish On Adaptive Biotechnologies Corporation (NASDAQ:ADPT) Than They Used To Be

The analysts covering Adaptive Biotechnologies Corporation (NASDAQ:ADPT) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for next year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business. Bidders are definitely seeing a different story, with the stock price of US$4.03 reflecting a 15% rise in the past week. Whether the downgrade will have a negative impact on demand for shares is yet to be seen.

After the downgrade, the eight analysts covering Adaptive Biotechnologies are now predicting revenues of US$230m in 2024. If met, this would reflect a sizeable 28% improvement in sales compared to the last 12 months. Losses are presumed to reduce, shrinking 16% per share from last year to US$1.14. Yet before this consensus update, the analysts had been forecasting revenues of US$258m and losses of US$0.96 per share in 2024. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

See our latest analysis for Adaptive Biotechnologies

The consensus price target fell 22% to US$9.17, implicitly signalling that lower earnings per share are a leading indicator for Adaptive Biotechnologies' valuation.

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. We can infer from the latest estimates that forecasts expect a continuation of Adaptive Biotechnologies'historical trends, as the 22% annualised revenue growth to the end of 2024 is roughly in line with the 24% annual revenue growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 3.7% annually. So although Adaptive Biotechnologies is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses next year, suggesting all may not be well at Adaptive Biotechnologies. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Adaptive Biotechnologies.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Adaptive Biotechnologies analysts - going out to 2025, and you can see them 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.