Earnings Update: Vir Biotechnology, Inc. (NASDAQ:VIR) Just Reported And Analysts Are Trimming Their Forecasts

It's shaping up to be a tough period for Vir Biotechnology, Inc. (NASDAQ:VIR), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. Statutory earnings fell substantially short of expectations, with revenues of US$2.4m missing forecasts by 57%. Losses exploded, with a per-share loss of US$1.56 some 63% below prior forecasts. 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.

Check out our latest analysis for Vir Biotechnology

Following the recent earnings report, the consensus from eight analysts covering Vir Biotechnology is for revenues of US$30.4m in 2025. This implies a stressful 61% decline in revenue compared to the last 12 months. The loss per share is expected to ameliorate slightly, reducing to US$3.58. Before this earnings announcement, the analysts had been modelling revenues of US$32.5m and losses of US$3.60 per share in 2025.

The consensus price target was broadly unchanged at US$29.88, implying that the business is performing roughly in line with expectations, despite a downwards adjustment to forecast revenue next year. 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. Currently, the most bullish analyst values Vir Biotechnology at US$110 per share, while the most bearish prices it at US$10.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 53% by the end of 2025. This indicates a significant reduction from annual growth of 14% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 21% per year. 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. 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. At Simply Wall St, we have a full range of analyst estimates for Vir Biotechnology going out to 2026, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 1 warning sign for Vir Biotechnology that you should be aware of.

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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.