Yahoo Finance Analysts Just Shipped A Substantial Upgrade To Their Bicycle Therapeutics plc (NASDAQ:BCYC) Estimates
Bicycle Therapeutics plc (NASDAQ:BCYC) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.
Following the latest upgrade, the current consensus, from the nine analysts covering Bicycle Therapeutics, is for revenues of US$9.9m in 2021, which would reflect an uneasy 10% reduction in Bicycle Therapeutics' sales over the past 12 months. Losses are forecast to narrow 3.1% to US$2.69 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$8.6m and losses of US$3.05 per share in 2021. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.
View our latest analysis for Bicycle Therapeutics
There was no major change to the consensus price target of US$40.11, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Bicycle Therapeutics at US$58.00 per share, while the most bearish prices it at US$30.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Bicycle Therapeutics' past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 14% annualised revenue decline to the end of 2021. That is a notable change from historical growth of 30% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 14% annually for the foreseeable future. It's pretty clear that Bicycle Therapeutics' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Bicycle Therapeutics is moving incrementally towards profitability. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Bicycle Therapeutics could be a good candidate for more research.
Analysts are clearly in love with Bicycle Therapeutics at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as dilutive stock issuance over the past year. You can learn more, and discover the 3 other warning signs we've identified, for free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
This article by Simply Wall St is general in nature. 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
