Analysts Are Betting On Ascendis Pharma A/S (NASDAQ:ASND) With A Big Upgrade This Week

Shareholders in Ascendis Pharma A/S (NASDAQ:ASND) 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 Ascendis Pharma will make substantially more sales than they'd previously expected. The market may be pricing in some blue sky too, with the share price gaining 22% to US$94.01 in the last 7 days. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.

Following the upgrade, the latest consensus from Ascendis Pharma's 13 analysts is for revenues of €175m in 2023, which would reflect a major 124% improvement in sales compared to the last 12 months. Losses are forecast to narrow 5.0% to €9.61 per share. Yet before this consensus update, the analysts had been forecasting revenues of €123m and losses of €10.33 per share in 2023. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to this year's revenue estimates, while at the same time reducing their loss estimates.

View our latest analysis for Ascendis Pharma

There was no major change to the consensus price target of €123, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Ascendis Pharma analyst has a price target of €194 per share, while the most pessimistic values it at €88.76. 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.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Ascendis Pharma's growth to accelerate, with the forecast 193% annualised growth to the end of 2023 ranking favourably alongside historical growth of 45% 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 17% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Ascendis Pharma is expected to grow much faster than its 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 Ascendis Pharma's prospects. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Ascendis Pharma.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Ascendis Pharma 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.