News Flash: Analysts Just Made A Notable Upgrade To Their Molecular Templates, Inc. (NASDAQ:MTEM) Forecasts

Molecular Templates, Inc. (NASDAQ:MTEM) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts have sharply increased their revenue numbers, with a view that Molecular Templates will make substantially more sales than they'd previously expected. The market seems to be pricing in some improvement in the business too, with the stock up 6.0% over the past week, closing at US$7.60. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

After this upgrade, Molecular Templates' eight analysts are now forecasting revenues of US$49m in 2021. This would be a substantial 86% improvement in sales compared to the last 12 months. Losses are expected to be contained, narrowing 17% from last year to US$1.50. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$38m and losses of US$1.61 per share in 2021. 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 Molecular Templates

There was no major change to the consensus price target of US$14.50, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook. 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. The most optimistic Molecular Templates analyst has a price target of US$22.00 per share, while the most pessimistic values it at US$8.00. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Molecular Templates' growth to accelerate, with the forecast 247% annualised growth to the end of 2021 ranking favourably alongside historical growth of 24% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 10% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Molecular Templates 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 this year, reflecting increased optimism around Molecular Templates' 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 this year's forecasts, it might be time to take another look at Molecular Templates.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 3 potential flags with Molecular Templates, 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 2 other flags 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.

When trading Molecular Templates or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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