Analysts Are Betting On C4 Therapeutics, Inc. (NASDAQ:CCCC) With A Big Upgrade This Week

C4 Therapeutics, Inc. (NASDAQ:CCCC) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts have sharply increased their revenue numbers, with a view that C4 Therapeutics will make substantially more sales than they'd previously expected.

Following the latest upgrade, the current consensus, from the twelve analysts covering C4 Therapeutics, is for revenues of US$25m in 2023, which would reflect a noticeable 6.4% reduction in C4 Therapeutics' sales over the past 12 months. Per-share losses are expected to creep up to US$2.93. Yet before this consensus update, the analysts had been forecasting revenues of US$20m and losses of US$3.03 per share in 2023. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

View our latest analysis for C4 Therapeutics

Despite these upgrades, the analysts have not made any major changes to their price target of US$20.00, implying that their latest estimates don't have a long term impact on what they think the stock is worth. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic C4 Therapeutics analyst has a price target of US$84.00 per share, while the most pessimistic values it at US$5.00. With such a wide range in price targets, the analysts are almost certainly betting on widely diverse outcomes for the underlying business. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.

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. We would highlight that sales are expected to reverse, with a forecast 8.4% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 10% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 19% annually for the foreseeable future. It's pretty clear that C4 Therapeutics' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting C4 Therapeutics is moving incrementally towards profitability. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at C4 Therapeutics.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple C4 Therapeutics 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.