Stock Analysis

Rainbows and Unicorns: Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT) Analysts Just Became A Lot More Optimistic

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NasdaqGM:ARCT
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Shareholders in Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. Investors have been pretty optimistic on Arcturus Therapeutics Holdings too, with the stock up 35% to US$123 over the past week. Could this upgrade be enough to drive the stock even higher?

After the upgrade, the nine analysts covering Arcturus Therapeutics Holdings are now predicting revenues of US$182m in 2021. If met, this would reflect a sizeable improvement in sales compared to the last 12 months. The losses are expected to disappear over the next year or so, with forecasts for a profit of US$0.12 per share next year. Yet before this consensus update, the analysts had been forecasting revenues of US$139m and losses of US$0.79 per share in 2021. It looks like there's been a definite improvement in business conditions, with a revenue upgrade supposed to lead to profitability sooner than previously forecast.

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NasdaqGM:ARCT Earnings and Revenue Growth December 8th 2020

It will come as no surprise to learn that the analysts have increased their price target for Arcturus Therapeutics Holdings 45% to US$107 on the back of these upgrades. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Arcturus Therapeutics Holdings at US$165 per share, while the most bearish prices it at US$62.00. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Arcturus Therapeutics Holdings' growth to accelerate, with the forecast 17x growth ranking favourably alongside historical growth of 9.6% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 21% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Arcturus Therapeutics Holdings to grow faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that there is now an expectation for Arcturus Therapeutics Holdings to become profitable next year, compared to previous expectations of a loss. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Arcturus Therapeutics Holdings could be worth investigating further.

Analysts are definitely bullish on Arcturus Therapeutics Holdings, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including major dilution from new stock issuance in the past year. For more information, you can click through to our platform to learn more about this and the 1 other concern we've identified .

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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What are the risks and opportunities for Arcturus Therapeutics Holdings?

Arcturus Therapeutics Holdings Inc., an RNA medicines company, focuses on the development of vaccines for infectious, and liver and respiratory rare diseases in the United States.

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Rewards

  • Earnings are forecast to grow 63.6% per year

Risks

No risks detected for ARCT from our risks checks.

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