Yahoo Finance ADC Therapeutics SA (NYSE:ADCT) First-Quarter Results: Here's What Analysts Are Forecasting For This Year
Last week, you might have seen that ADC Therapeutics SA (NYSE:ADCT) released its quarterly result to the market. The early response was not positive, with shares down 6.8% to US$4.41 in the past week. 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. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
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 decent 13% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 33% to US$1.84. Before this earnings announcement, the analysts had been modelling revenues of US$80.9m and losses of US$2.15 per share in 2024. While the revenue estimates fell, sentiment seems to have improved, with the analysts making a favorable reduction in losses per share 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. There are some variant perceptions on ADC Therapeutics, with the most bullish analyst valuing it at US$13.00 and the most bearish at US$8.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. Even so, long term profitability is more important for the value creation process. 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple ADC Therapeutics analysts - going out to 2026, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 4 warning signs for ADC Therapeutics (1 is potentially serious) 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.
