Broker Revenue Forecasts For Codiak BioSciences, Inc. (NASDAQ:CDAK) Are Surging Higher

Simply Wall St
March 15, 2022
Source: Shutterstock

Shareholders in Codiak BioSciences, Inc. (NASDAQ:CDAK) 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 Codiak BioSciences will make substantially more sales than they'd previously expected. Investor sentiment seems to be improving too, with the share price up 9.5% to US$4.71 over the past 7 days. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

Following the upgrade, the consensus from twin analysts covering Codiak BioSciences is for revenues of US$8.8m in 2022, implying a concerning 62% decline in sales compared to the last 12 months. Losses are supposed to balloon 59% to US$2.63 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$6.2m and losses of US$2.66 per share in 2022. 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.

See our latest analysis for Codiak BioSciences

NasdaqGM:CDAK Earnings and Revenue Growth March 15th 2022

There were no major changes to the US$29.00 consensus price target despite the higher revenue estimates, with the analysts seeming to believe that ongoing losses have a larger impact on the valuation than growing sales. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Codiak BioSciences, with the most bullish analyst valuing it at US$45.00 and the most bearish at US$18.00 per share. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the 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. We would highlight that sales are expected to reverse, with a forecast 62% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 108% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 11% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Codiak BioSciences is expected to lag the wider industry.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Codiak BioSciences 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 Codiak BioSciences.

Analysts are definitely bullish on Codiak BioSciences, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including a short cash runway. For more information, you can click through to our platform to learn more about this and the 3 other concerns 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.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.