News Flash: Analysts Just Made A Meaningful Upgrade To Their Fulcrum Therapeutics, Inc. (NASDAQ:FULC) Forecasts

Celebrations may be in order for Fulcrum Therapeutics, Inc. (NASDAQ:FULC) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline. The market may be pricing in some blue sky too, with the share price gaining 158% to US$18.77 in the last 7 days. Could this upgrade be enough to drive the stock even higher?

Following the latest upgrade, the seven analysts covering Fulcrum Therapeutics provided consensus estimates of US$11m revenue in 2021, which would reflect a chunky 17% decline on its sales over the past 12 months. Losses are forecast to narrow 2.0% to US$2.47 per share. However, before this estimates update, the consensus had been expecting revenues of US$9.7m and US$2.63 per share in losses. 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 Fulcrum Therapeutics

It will come as no surprise to learn that the analysts have increased their price target for Fulcrum Therapeutics 26% to US$26.14 on the back of these upgrades. 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. There are some variant perceptions on Fulcrum Therapeutics, with the most bullish analyst valuing it at US$39.00 and the most bearish at US$11.00 per share. With such a wide range in price targets, the analysts are almost certainly betting on widely diverse outcomes for the underlying business. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that sales are expected to reverse, with a forecast 31% annualised revenue decline to the end of 2021. That is a notable change from historical growth of 1,615% over the last year. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.5% per year. It's pretty clear that Fulcrum 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 Fulcrum Therapeutics' prospects. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Fulcrum Therapeutics.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 4 potential concerns with Fulcrum Therapeutics, including dilutive stock issuance over the past year. For more information, you can click through to our platform to learn more about this and the 3 other concerns we've identified .

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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.
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