Yahoo Finance Industry Analysts Just Upgraded Their Seattle Genetics, Inc. (NASDAQ:SGEN) Revenue Forecasts By 10%
Celebrations may be in order for Seattle Genetics, Inc. (NASDAQ:SGEN) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline. Investors have been pretty optimistic on Seattle Genetics too, with the stock up 20% to US$165 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.
Following the upgrade, the current consensus from Seattle Genetics' 19 analysts is for revenues of US$1.1b in 2020 which - if met - would reflect a meaningful 12% increase on its sales over the past 12 months. Losses are supposed to balloon 52% to US$2.82 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$965m and losses of US$2.84 per share in 2020. So there's been quite a change-up of views after the recent consensus updates, withthe analysts noticeably increasing their revenue forecasts while also expecting losses per share to hold steady.
Check out our latest analysis for Seattle Genetics
The consensus price target rose 9.4% to US$147, with the analysts encouraged by the improved revenue outlook even though the company remains lossmaking. 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. Currently, the most bullish analyst values Seattle Genetics at US$178 per share, while the most bearish prices it at US$95.00. 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.
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 would highlight that Seattle Genetics' revenue growth is expected to slow, with forecast 12% increase next year well below the historical 23% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 18% per year. Factoring in the forecast slowdown in growth, it seems obvious that Seattle Genetics is also expected to grow slower than other industry participants.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Seattle Genetics is moving incrementally towards profitability. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Seattle Genetics.
Better yet, Seattle Genetics is expected to break-even soon - within the next few years - according to analyst forecasts, which would be a momentous event for shareholders. For more information, you can click through to our free platform to learn more about these forecasts.
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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