New Forecasts: Here's What Analysts Think The Future Holds For Poseida Therapeutics, Inc. (NASDAQ:PSTX)

Shareholders in Poseida Therapeutics, Inc. (NASDAQ:PSTX) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. The market may be pricing in some blue sky too, with the share price gaining 71% to US$2.79 in the last 7 days. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

After the upgrade, the consensus from Poseida Therapeutics' five analysts is for revenues of US$62m in 2023, which would reflect a disturbing 60% decline in sales compared to the last year of performance. Per-share losses are expected to explode, reaching US$1.43 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$56m and losses of US$1.75 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.

See our latest analysis for Poseida Therapeutics

The consensus price target fell 12%, to US$11.80, suggesting that the analysts remain pessimistic on the company, despite the improved earnings and revenue outlook.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Poseida 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 84% by the end of 2023. This indicates a significant reduction from annual growth of 87% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 15% per year. It's pretty clear that Poseida Therapeutics' revenues are expected to perform substantially worse than the wider 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 Poseida Therapeutics' prospects. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. A lower price target is not intuitively what we would expect from a company whose business prospects are improving - at least judging by these forecasts - but if the underlying fundamentals are strong, Poseida Therapeutics could be one for the watch list.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 4 potential flags with Poseida Therapeutics, including dilutive stock issuance over the past year. You can learn more, and discover the 2 other flags we've identified, for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.