Analysts Are Betting On Repare Therapeutics Inc. (NASDAQ:RPTX) With A Big Upgrade This Week

Repare Therapeutics Inc. (NASDAQ:RPTX) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline.

After the upgrade, the consensus from Repare Therapeutics' six analysts is for revenues of US$57m in 2023, which would reflect a concerning 58% decline in sales compared to the last year of performance. Losses are supposed to balloon 297% to US$2.76 per share. However, before this estimates update, the consensus had been expecting revenues of US$44m and US$2.79 per share in losses. So there's definitely been a change in sentiment in this update, with the analysts upgrading this year's revenue estimates, while at the same time holding losses per share steady.

Check out our latest analysis for Repare Therapeutics

There were no major changes to the US$26.67 consensus price target despite the higher revenue estimates, with the analysts seeming to believe that ongoing losses have a larger impact on the valuation than growing sales. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Repare Therapeutics, with the most bullish analyst valuing it at US$49.00 and the most bearish at US$11.00 per share. We would probably assign less value to the forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 69% by the end of 2023. This indicates a significant reduction from annual growth of 138% 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 - Repare Therapeutics is expected to lag 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 Repare Therapeutics' prospects. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Repare Therapeutics.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Repare Therapeutics analysts - going out to 2025, and you can see them 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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