Analysts Are Updating Their ADC Therapeutics SA (NYSE:ADCT) Estimates After Its First-Quarter Results

ADC Therapeutics SA (NYSE:ADCT) shareholders are probably feeling a little disappointed, since its shares fell 3.4% to US$4.57 in the week after its latest first-quarter results. The results overall were pretty much dead in line with analyst forecasts; revenues were US$18m and statutory losses were US$0.56 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. 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 ADC Therapeutics

Taking into account the latest results, the current consensus from ADC Therapeutics' six analysts is for revenues of US$77.7m in 2024. This would reflect a notable 13% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 33% to US$1.84. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$80.9m and losses of US$2.15 per share in 2024. Although the revenue estimates have fallen somewhat, ADC Therapeutics'future looks a little different to the past, with a favorable reduction in the loss per share forecasts in particular.

There was no major change to the US$10.00average price target, suggesting that the adjustments to revenue and earnings are not expected to have a long-term impact on the business. 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. The most optimistic ADC Therapeutics analyst has a price target of US$13.00 per share, while the most pessimistic values it at US$8.00. This shows there is still a bit of 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.

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. We would highlight that ADC Therapeutics' revenue growth is expected to slow, with the forecast 18% annualised growth rate until the end of 2024 being well below the historical 60% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 18% annually. Factoring in the forecast slowdown in growth, it looks like ADC Therapeutics is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. Still, earnings are more important to the intrinsic value of the business. The consensus price target held steady at US$10.00, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on ADC Therapeutics. Long-term earnings power is much more important than next year's profits. We have forecasts for ADC Therapeutics going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - ADC Therapeutics has 4 warning signs (and 1 which is potentially serious) we think you should know about.

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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.