Need To Know: Analysts Are Much More Bullish On HOOKIPA Pharma Inc. (NASDAQ:HOOK) Revenues

Shareholders in HOOKIPA Pharma Inc. (NASDAQ:HOOK) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

Following the upgrade, the latest consensus from HOOKIPA Pharma's six analysts is for revenues of US$22m in 2023, which would reflect a substantial 112% improvement in sales compared to the last 12 months. Losses are expected to be contained, narrowing 19% from last year to US$1.10. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$20m and losses of US$1.20 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.

Our analysis indicates that HOOK is potentially overvalued!

Despite these upgrades, the analysts have not made any major changes to their price target of US$6.43, implying that their latest estimates don't have a long term impact on what they think the stock is worth. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values HOOKIPA Pharma at US$11.00 per share, while the most bearish prices it at US$2.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. 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.

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. The analysts are definitely expecting HOOKIPA Pharma's growth to accelerate, with the forecast 82% annualised growth to the end of 2023 ranking favourably alongside historical growth of 17% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 14% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that HOOKIPA Pharma is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that analysts reduced their loss per share estimates for next year, reflecting increased optimism around HOOKIPA Pharma's prospects. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Seeing the dramatic upgrade to next year's forecasts, it might be time to take another look at HOOKIPA Pharma.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 4 potential concerns with HOOKIPA Pharma, including major dilution from new stock issuance in the past year. For more information, you can click through to our platform to learn more about this and the 2 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.