Industry Analysts Just Upgraded Their 2seventy bio, Inc. (NASDAQ:TSVT) Revenue Forecasts By 12%

2seventy bio, Inc. (NASDAQ:TSVT) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts have sharply increased their revenue numbers, with a view that 2seventy bio will make substantially more sales than they'd previously expected.

Following the upgrade, the most recent consensus for 2seventy bio from its seven analysts is for revenues of US$128m in 2023 which, if met, would be a substantial 40% increase on its sales over the past 12 months. Losses are expected to be contained, narrowing 13% from last year to US$4.42. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$115m and losses of US$4.82 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 this year's revenue estimates, while at the same time reducing their loss estimates.

View our latest analysis for 2seventy bio

Despite these upgrades, the analysts have not made any major changes to their price target of US$27.67, implying that their latest estimates don't have a long term impact on what they think the stock is worth. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on 2seventy bio, with the most bullish analyst valuing it at US$34.00 and the most bearish at US$21.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. For example, we noticed that 2seventy bio's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 40% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 23% a year over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 13% per year. Not only are 2seventy bio's revenues expected to improve, it seems that the analysts are also expecting it to grow faster 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 2seventy bio's prospects. They also upgraded their revenue estimates for this year, and sales are expected to grow faster 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 2seventy bio.

Analysts are clearly in love with 2seventy bio 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. You can learn more, and discover the 3 other risks 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.