Analysts Are Betting On Apellis Pharmaceuticals, Inc. (NASDAQ:APLS) With A Big Upgrade This Week

Shareholders in Apellis Pharmaceuticals, Inc. (NASDAQ:APLS) 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 Apellis Pharmaceuticals will make substantially more sales than they'd previously expected.

After this upgrade, Apellis Pharmaceuticals' 16 analysts are now forecasting revenues of US$304m in 2023. This would be a sizeable 187% improvement in sales compared to the last 12 months. The loss per share is expected to ameliorate slightly, reducing to US$5.45. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$192m and losses of US$5.41 per share in 2023. So there's definitely been a change in sentiment in this update, with the analysts upgrading this year's revenue estimates, while at the same time holding losses per share steady.

View our latest analysis for Apellis Pharmaceuticals

The consensus price target rose 16% to US$103, with the analysts encouraged by the improved revenue outlook even though the company remains lossmaking. 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. Currently, the most bullish analyst values Apellis Pharmaceuticals at US$156 per share, while the most bearish prices it at US$76.00. 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.

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. The analysts are definitely expecting Apellis Pharmaceuticals' growth to accelerate, with the forecast 3x annualised growth to the end of 2023 ranking favourably alongside historical growth of 47% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 19% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Apellis Pharmaceuticals 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 this year, reflecting increased optimism around Apellis Pharmaceuticals' prospects. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Apellis Pharmaceuticals.

It's great to see the analysts upgrading their estimates, but the biggest highlight to us is that the business is expected to become profitable in the foreseeable future. For more information, you can click through to our free platform to learn more about these forecasts.

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.

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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.