Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) Just Reported Earnings, And Analysts Cut Their Target Price

There's been a major selloff in Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) shares in the week since it released its annual report, with the stock down 27% to US$4.24. The results overall were pretty much dead in line with analyst forecasts; revenues were US$164m and statutory losses were US$1.28 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Iovance Biotherapeutics

After the latest results, the twelve analysts covering Iovance Biotherapeutics are now predicting revenues of US$449.1m in 2025. If met, this would reflect a huge 174% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 33% to US$0.82. Before this latest report, the consensus had been expecting revenues of US$455.0m and US$0.88 per share in losses. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrade to loss per share forecasts for this year.

Even with the lower forecast losses, the analysts lowered their valuations, with the average price target falling 8.2% to US$21.08. It looks likethe analysts have become less optimistic about the overall business. 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 Iovance Biotherapeutics, with the most bullish analyst valuing it at US$34.00 and the most bearish at US$10.00 per share. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

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. The analysts are definitely expecting Iovance Biotherapeutics' growth to accelerate, with the forecast 174% annualised growth to the end of 2025 ranking favourably alongside historical growth of 103% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 20% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Iovance Biotherapeutics is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 Iovance Biotherapeutics going out to 2027, and you can see them free on our platform here.

You can also see our analysis of Iovance Biotherapeutics' Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.