Vaccitech plc Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Last week saw the newest second-quarter earnings release from Vaccitech plc (NASDAQ:VACC), an important milestone in the company's journey to build a stronger business. In addition to smashing expectations with revenues of US$17m, Vaccitech delivered a surprise statutory profit of US$0.41 per share, a notable improvement compared to analyst expectations of a loss. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Vaccitech

Following the latest results, Vaccitech's four analysts are now forecasting revenues of US$45.7m in 2022. This would be a huge 42% improvement in sales compared to the last 12 months. Per-share losses are expected to explode, reaching US$0.082 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$26.1m and losses of US$0.90 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.

There was no major change to the consensus price target of US$19.50, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook. 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. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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. It's pretty clear that there is an expectation that Vaccitech's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 103% growth on an annualised basis. This is compared to a historical growth rate of 733% over the past year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 15% per year. So it's pretty clear that, while Vaccitech's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Vaccitech analysts - going out to 2024, and you can see them free on our platform here.

Before you take the next step you should know about the 4 warning signs for Vaccitech (2 can't be ignored!) that we have uncovered.

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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.