Industry Analysts Just Made A Sizeable Upgrade To Their Sutro Biopharma, Inc. (NASDAQ:STRO) Revenue Forecasts

Shareholders in Sutro Biopharma, Inc. (NASDAQ:STRO) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

Following the upgrade, the consensus from seven analysts covering Sutro Biopharma is for revenues of US$37m in 2021, implying a concerning 26% decline in sales compared to the last 12 months. Losses are supposed to balloon 50% to US$2.30 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$31m and losses of US$2.36 per share in 2021. 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 Sutro Biopharma

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 33% by the end of 2021. This indicates a significant reduction from annual growth of 9.9% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 14% annually for the foreseeable future. It's pretty clear that Sutro Biopharma's 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 Sutro Biopharma's prospects. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Sutro Biopharma.

Analysts are clearly in love with Sutro Biopharma at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as major dilution from new stock issuance in 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.

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