Industry Analysts Just Made An Incredible Upgrade To Their Fate Therapeutics, Inc. (NASDAQ:FATE) Revenue Forecasts

Fate Therapeutics, Inc. (NASDAQ:FATE) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline. The market seems to be pricing in some improvement in the business too, with the stock up 9.9% over the past week, closing at US$3.67. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

After the upgrade, the consensus from Fate Therapeutics' 15 analysts is for revenues of US$11m in 2024, which would reflect a small 7.9% decline in sales compared to the last year of performance. Per-share losses are expected to creep up to US$1.63. However, before this estimates update, the consensus had been expecting revenues of US$5.8m and US$1.81 per share in losses. 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.

Check out our latest analysis for Fate Therapeutics

There was no major change to the consensus price target of US$6.46, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook.

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 15% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 29% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 23% annually for the foreseeable future. It's pretty clear that Fate Therapeutics' revenues are expected to perform substantially worse than the wider 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 Fate Therapeutics' prospects. 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 Fate Therapeutics.

Analysts are definitely bullish on Fate Therapeutics, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including dilutive stock issuance over the past year. You can learn more, and discover the 3 other concerns we've identified, for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.