Vaccitech plc (NASDAQ:VACC) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline. Investors have been pretty optimistic on Vaccitech too, with the stock up 41% to US$4.60 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.
After this upgrade, Vaccitech's four analysts are now forecasting revenues of US$26m in 2022. This would be a sizeable 73% improvement in sales compared to the last 12 months. Per-share losses are expected to creep up to US$0.91. Yet before this consensus update, the analysts had been forecasting revenues of US$17m and losses of US$0.98 per share in 2022. 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.
Yet despite these upgrades, the analysts cut their price target 5.9% to US$20.00, implicitly signalling that the ongoing losses are likely to weigh negatively on Vaccitech's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Vaccitech, with the most bullish analyst valuing it at US$23.00 and the most bearish at US$16.00 per share. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Vaccitech's past performance and to peers in the same industry. We would highlight that Vaccitech's revenue growth is expected to slow, with the forecast 107% annualised growth rate until the end of 2022 being well below the historical 248% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% per year. Even after the forecast slowdown in growth, it seems obvious that Vaccitech is also expected to grow faster than the wider industry.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Vaccitech is moving incrementally towards profitability. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Vaccitech.
Analysts are clearly in love with Vaccitech at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as dilutive stock issuance over the past year. You can learn more, and discover the 3 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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