Analysts Are Upgrading ADC Therapeutics SA (NYSE:ADCT) After Its Latest Results

ADC Therapeutics SA (NYSE:ADCT) just released its first-quarter report and things are looking bullish. Results clearly exceeded expectations, with a substantial revenue beat leading to smaller losses in what looks like a definite win for investors. Revenues were US$23m and the statutory loss per share was US$0.36, smaller than the analysts had forecast. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on ADC Therapeutics after the latest results.

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Taking into account the latest results, the most recent consensus for ADC Therapeutics from six analysts is for revenues of US$77.5m in 2025. If met, it would imply a credible 2.2% increase on its revenue over the past 12 months. Per-share losses are predicted to creep up to US$1.60. Before this latest report, the consensus had been expecting revenues of US$73.4m and US$1.62 per share in losses.

Check out our latest analysis for ADC Therapeutics

The consensus price target fell 6.8% to US$8.20as the analysts signal that ongoing losses are likely to weigh on the stock price. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on ADC Therapeutics, with the most bullish analyst valuing it at US$10.00 and the most bearish at US$7.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that ADC Therapeutics' revenue growth is expected to slow, with the forecast 3.0% annualised growth rate until the end of 2025 being well below the historical 31% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 17% per year. Factoring in the forecast slowdown in growth, it seems obvious that ADC Therapeutics is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of ADC Therapeutics' future valuation.

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 estimates - from multiple ADC Therapeutics analysts - going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 3 warning signs for ADC Therapeutics you should be aware of, and 1 of them can't be ignored.

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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.