Alvotech (NASDAQ:ALVO) Just Reported Yearly Earnings: Have Analysts Changed Their Mind On The Stock?

Alvotech (NASDAQ:ALVO) just released its latest yearly report and things are not looking great. It was not a great statutory result, with revenues coming in 30% lower than the analysts predicted. Unsurprisingly, earnings also fell seriously short of forecasts, turning into a per-share loss of US$2.43. 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 Alvotech

Following the latest results, Alvotech's five analysts are now forecasting revenues of US$331.5m in 2024. This would be a sizeable 255% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 70% to US$0.60. Before this earnings announcement, the analysts had been modelling revenues of US$301.5m and losses of US$0.46 per share in 2024. While this year's revenue estimates increased, there was also a sizeable expansion in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

The consensus price target stayed unchanged at US$15.17, seeming to suggest that higher forecast losses are not expected to have a long term impact on the valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Alvotech analyst has a price target of US$28.00 per share, while the most pessimistic values it at US$6.00. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Alvotech's past performance and to peers in the same industry. It's clear from the latest estimates that Alvotech's rate of growth is expected to accelerate meaningfully, with the forecast 255% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 14% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 17% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Alvotech is expected to grow much faster than its 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 Alvotech. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at US$15.17, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Alvotech going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for Alvotech (2 are a bit concerning!) that we have uncovered.

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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.