Shareholders in ADC Therapeutics SA (NYSE:ADCT) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.
Following the upgrade, the current consensus from ADC Therapeutics' six analysts is for revenues of US$159m in 2022 which - if met - would reflect a huge 98% increase on its sales over the past 12 months. Losses are forecast to narrow 5.0% to US$2.42 per share. However, before this estimates update, the consensus had been expecting revenues of US$132m and US$2.82 per share in losses. 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.
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. We can infer from the latest estimates that forecasts expect a continuation of ADC Therapeutics'historical trends, as the 149% annualised revenue growth to the end of 2022 is roughly in line with the 134% annual revenue growth over the past three years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 14% annually. So although ADC Therapeutics is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around ADC Therapeutics' prospects. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. The clear improvement in sentiment should be enough to get most shareholders feeling more optimistic about ADC Therapeutics' future.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for ADC Therapeutics going out to 2024, and you can see them free on our platform here..
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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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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