Earnings Update: Altimmune, Inc. (NASDAQ:ALT) Just Reported And Analysts Are Trimming Their Forecasts

By
Simply Wall St
Published
November 11, 2020
NasdaqGM:ALT

Altimmune, Inc. (NASDAQ:ALT) defied analyst predictions to release its third-quarter results, which were ahead of market expectations. The results were impressive, with revenues of US$2.9m exceeding analyst forecasts by 180%, and statutory losses of US$0.54 were likewise much smaller than the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Altimmune

earnings-and-revenue-growth
NasdaqGM:ALT Earnings and Revenue Growth November 11th 2020

After the latest results, the four analysts covering Altimmune are now predicting revenues of US$229.8m in 2021. If met, this would reflect a sizeable 3,465% improvement in sales compared to the last 12 months. Altimmune is also expected to turn profitable, with statutory earnings of US$1.21 per share. Before this earnings report, the analysts had been forecasting revenues of US$273.6m and earnings per share (EPS) of US$4.86 in 2021. Indeed, we can see that the analysts are a lot more bearish about Altimmune's prospects following the latest results, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

What's most unexpected is that the consensus price target rose 490% to US$49.00, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Altimmune, with the most bullish analyst valuing it at US$80.00 and the most bearish at US$31.00 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Altimmune's past performance and to peers in the same industry. The analysts are definitely expecting Altimmune's growth to accelerate, with the forecast 30x growth ranking favourably alongside historical growth of 6.6% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 20% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Altimmune to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded their revenue estimates, although industry data suggests that Altimmune's revenues are expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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. We have forecasts for Altimmune going out to 2024, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Altimmune (of which 1 is concerning!) you should know about.

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This article by Simply Wall St is general in nature. 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.
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