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Broker Revenue Forecasts For Vaccitech plc (NASDAQ:VACC) Are Surging Higher

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Shareholders in Vaccitech plc (NASDAQ:VACC) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline. The market may be pricing in some blue sky too, with the share price gaining 41% to US$4.60 in the last 7 days. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.

Following the upgrade, the most recent consensus for Vaccitech from its four analysts is for revenues of US$26m in 2022 which, if met, would be a huge 73% increase on its sales over the past 12 months. Per-share losses are expected to creep up to US$0.91. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$17m and losses of US$0.98 per share in 2022. 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 Vaccitech

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The consensus price target fell 5.9%, to US$20.00, suggesting that the analysts remain pessimistic on the company, despite the improved earnings and revenue outlook. 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 Vaccitech, with the most bullish analyst valuing it at US$23.00 and the most bearish at US$16.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Vaccitech's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 107% growth on an annualised basis. This is compared to a historical growth rate of 248% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% annually. So it's pretty clear that, while Vaccitech's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Vaccitech is moving incrementally towards profitability. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Vaccitech.

Analysts are clearly in love with Vaccitech 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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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