It's been a good week for Atea Pharmaceuticals, Inc. (NASDAQ:AVIR) shareholders, because the company has just released its latest first-quarter results, and the shares gained 7.5% to US$22.91. In addition to smashing expectations with revenues of US$66m, Atea Pharmaceuticals delivered a surprise statutory profit of US$0.34 per share, a notable improvement compared to analyst expectations of a loss. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the most recent consensus for Atea Pharmaceuticals from three analysts is for revenues of US$1.18b in 2021 which, if met, would be a huge 927% increase on its sales over the past 12 months. Statutory earnings per share are expected to crater 63% to US$0.22 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.18b and earnings per share (EPS) of US$0.22 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The consensus price target rose 43% to US$83.33despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Atea Pharmaceuticals' earnings by assigning a price premium. 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 Atea Pharmaceuticals at US$102 per share, while the most bearish prices it at US$66.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Atea Pharmaceuticals going out to 2023, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 1 warning sign for Atea Pharmaceuticals you should know about.
If you’re looking to trade Atea Pharmaceuticals, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted
What are the risks and opportunities for Atea Pharmaceuticals?
Trading at 93.2% below our estimate of its fair value
Earnings grew by 44.3% over the past year
Earnings are forecast to decline by an average of 4.3% per year for the next 3 years
Significant insider selling over the past 3 months
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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
Atea Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, focused on discovering, developing, and commercializing antiviral therapeutics for patients suffering from viral infections.
Flawless balance sheet and good value.