Earnings Beat: SAB Biotherapeutics, Inc. (NASDAQ:SABS) Just Beat Analyst Forecasts, And Analysts Have Been Lifting Their Forecasts

SAB Biotherapeutics, Inc. (NASDAQ:SABS) missed earnings with its latest third-quarter results, disappointing overly-optimistic forecasters. Earnings missed the mark badly, with revenues of US$3.6m falling 48% short of expectations. Losses correspondingly increased, with a US$0.16 per-share statutory loss some 12% larger than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Our analysis indicates that SABS is potentially overvalued!

After the latest results, the two analysts covering SAB Biotherapeutics are now predicting revenues of US$40.2m in 2023. If met, this would reflect a major 23% improvement in sales compared to the last 12 months. Losses are forecast to balloon 23% to US$0.64 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$21.8m and losses of US$0.67 per share in 2023. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to next year's revenue estimates, while at the same time reducing their loss estimates.

Yet despite these upgrades, the analysts cut their price target 21% to US$5.08, implicitly signalling that the ongoing losses are likely to weigh negatively on SAB Biotherapeutics' valuation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We can infer from the latest estimates that forecasts expect a continuation of SAB Biotherapeutics'historical trends, as the 18% annualised revenue growth to the end of 2023 is roughly in line with the 16% annual revenue growth over the past three years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 13% annually. So it's pretty clear that SAB Biotherapeutics is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.

Plus, you should also learn about the 4 warning signs we've spotted with SAB Biotherapeutics (including 2 which shouldn't be ignored) .

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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.