News Flash: Analysts Just Made A Sizeable Upgrade To Their Jounce Therapeutics, Inc. (NASDAQ:JNCE) Forecasts

Jounce Therapeutics, Inc. (NASDAQ:JNCE) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. Investors have been pretty optimistic on Jounce Therapeutics too, with the stock up 17% to US$13.00 over the past week. Could this upgrade be enough to drive the stock even higher?

After the upgrade, the consensus from Jounce Therapeutics' six analysts is for revenues of US$54m in 2021, which would reflect a chunky 13% decline in sales compared to the last year of performance. Losses are forecast to hold steady at around US$1.26. However, before this estimates update, the consensus had been expecting revenues of US$43m and US$1.53 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.

View our latest analysis for Jounce Therapeutics

It will come as no surprise to learn that the analysts have increased their price target for Jounce Therapeutics 28% to US$12.63 on the back of these upgrades. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Jounce Therapeutics at US$15.00 per share, while the most bearish prices it at US$5.50. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Jounce Therapeutics' past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 13% by the end of 2021. This indicates a significant reduction from annual growth of 9.7% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 19% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Jounce Therapeutics is expected to lag the wider industry.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Jounce Therapeutics is moving incrementally towards profitability. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Jounce Therapeutics.

Analysts are clearly in love with Jounce Therapeutics at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as dilutive stock issuance over the past year. You can learn more, and discover the 4 other concerns we've identified, for free on our platform here.

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.

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