Today is shaping up negative for Adaptimmune Therapeutics plc (NASDAQ:ADAP) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic. Investors however, have been notably more optimistic about Adaptimmune Therapeutics recently, with the stock price up a notable 26% to US$2.22 in the past week. It will be interesting to see if the downgrade has an impact on buying demand for the company's shares.
Following the downgrade, the current consensus from Adaptimmune Therapeutics' six analysts is for revenues of US$19m in 2022 which - if met - would reflect a substantial 64% increase on its sales over the past 12 months. Losses are expected to increase slightly, to US$1.13 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$26m and losses of US$1.12 per share in 2022. So there's definitely been a change in sentiment in this update, with the analysts administering a substantial haircut to this year's revenue estimates, while at the same time holding losses per share steady.
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. One thing stands out from these estimates, which is that Adaptimmune Therapeutics is forecast to grow faster in the future than it has in the past, with revenues expected to display 169% annualised growth until the end of 2022. If achieved, this would be a much better result than the 44% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 15% per year. So it looks like Adaptimmune Therapeutics is expected to grow faster than its competitors, at least for a while.
The Bottom Line
Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Adaptimmune Therapeutics after today.
That said, the analysts might have good reason to be negative on Adaptimmune Therapeutics, given dilutive stock issuance over the past year. Learn more, and discover the 3 other flags we've identified, for 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 downgrading 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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