Earnings Beat: ImmunityBio, Inc. (NASDAQ:IBRX) Just Beat Analyst Forecasts, And Analysts Have Been Lifting Their Forecasts

Explore ImmunityBio's Fair Values from the Community and select yours

A week ago, ImmunityBio, Inc. (NASDAQ:IBRX) came out with a strong set of second-quarter numbers that could potentially lead to a re-rate of the stock. ImmunityBio beat expectations with revenues of US$26m arriving 9.9% ahead of forecasts. The company also reported a statutory loss of US$0.10, 7.4% smaller than was expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on ImmunityBio after the latest results.

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Following the latest results, ImmunityBio's five analysts are now forecasting revenues of US$110.2m in 2025. This would be a major 95% improvement in revenue compared to the last 12 months. Per-share losses are expected to explode, reaching US$0.50 per share. Before this latest report, the consensus had been expecting revenues of US$100.3m and US$0.48 per share in losses. Overall it looks as though the analysts were a bit mixed on the latest consensus updates. Although there was a nice uplift to revenue, the consensus also made a pronounced increase to its losses per share forecasts.

Check out our latest analysis for ImmunityBio

It will come as no surprise that expanding losses caused the consensus price target to fall 6.5% to US$11.40with the analysts implicitly ranking ongoing losses as a greater concern than growing revenues. 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. Currently, the most bullish analyst values ImmunityBio at US$30.00 per share, while the most bearish prices it at US$5.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily 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. It's clear from the latest estimates that ImmunityBio's rate of growth is expected to accelerate meaningfully, with the forecast 279% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 93% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 18% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that ImmunityBio is expected to grow much faster than its industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at ImmunityBio. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of ImmunityBio's future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for ImmunityBio going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for ImmunityBio (1 is a bit concerning!) that you need to take into consideration.

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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.