It's been a mediocre week for ADC Therapeutics SA (NYSE:ADCT) shareholders, with the stock dropping 10% to US$2.74 in the week since its latest quarterly results. Revenues of US$17m came in 7.4% below estimates, but statutory losses were well contained with a per-share loss of US$0.38 being some 17% smaller than what the analysts were predicting. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Taking into account the latest results, the consensus forecast from ADC Therapeutics' six analysts is for revenues of US$72.9m in 2024. This reflects a meaningful 9.2% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 27% to US$1.61. Before this latest report, the consensus had been expecting revenues of US$78.0m and US$1.89 per share in losses. 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$10.25average price target, suggesting that the adjustments to revenue and earnings are not expected to have a long-term impact on the business. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. 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. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await ADC Therapeutics shareholders.

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 19% annualised growth rate until the end of 2024 being well below the historical 52% 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. So it's pretty clear that, while ADC Therapeutics' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for 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. Still, earnings per share are more important to value creation for shareholders. 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.

With that in mind, we wouldn't be too quick to come to a conclusion on ADC Therapeutics. Long-term earnings power is much more important than next year's profits. We have forecasts for ADC Therapeutics going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - ADC Therapeutics has 5 warning signs (and 1 which is concerning) we think you should know about.

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