Analysts Are Updating Their Vir Biotechnology, Inc. (NASDAQ:VIR) Estimates After Its Second-Quarter Results

It's shaping up to be a tough period for Vir Biotechnology, Inc. (NASDAQ:VIR), which a week ago released some disappointing second-quarter results that could have a notable impact on how the market views the stock. Earnings missed the mark, with revenues of US$3.1m falling badly (59%) short of expectations. Losses were mildly higher, with a US$1.02 per-share loss being 5.8% above what the analysts modelled. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Vir Biotechnology

Following the recent earnings report, the consensus from seven analysts covering Vir Biotechnology is for revenues of US$64.7m in 2024. This implies a not inconsiderable 18% decline in revenue compared to the last 12 months. The loss per share is expected to ameliorate slightly, reducing to US$3.29. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$80.4m and losses of US$3.56 per share in 2024. We can see there's definitely been a change in sentiment in this update, with the analysts administering a meaningful downgrade to next year's revenue estimates, while at the same time reducing their loss estimates.

The consensus price target was broadly unchanged at US$31.25, implying that the business is performing roughly in line with expectations, despite adjustments to both revenue and earnings estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Vir Biotechnology at US$110 per share, while the most bearish prices it at US$13.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 33% by the end of 2024. This indicates a significant reduction from annual growth of 24% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 18% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Vir Biotechnology is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at US$31.25, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Vir Biotechnology going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Vir Biotechnology (including 1 which is potentially serious) .

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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.

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