Arcellx, Inc. (NASDAQ:ACLX) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's forecasts. The analysts have sharply increased their revenue numbers, with a view that Arcellx will make substantially more sales than they'd previously expected. Investors have been pretty optimistic on Arcellx too, with the stock up 21% to US$55.21 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.
After the upgrade, the eleven analysts covering Arcellx are now predicting revenues of US$73m in 2024. If met, this would reflect a huge 55% improvement in sales compared to the last 12 months. Losses are expected to be contained, narrowing 14% per share from last year to US$2.28 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$66m and losses of US$2.40 per share in 2024. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to next year's revenue estimates, while at the same time reducing their loss estimates.
See our latest analysis for Arcellx
The consensus price target rose 15% to US$60.09, with the analysts encouraged by the higher revenue and lower forecast losses for next year.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Arcellx's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 42% growth on an annualised basis. This is compared to a historical growth rate of 80% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 16% per year. So it's pretty clear that, while Arcellx's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing here is that analysts reduced their loss per share estimates for next year, reflecting increased optimism around Arcellx's prospects. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better 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 next year's forecasts, it might be time to take another look at Arcellx.
Analysts are definitely bullish on Arcellx, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including dilutive stock issuance over the past year. For more information, you can click through to our platform to learn more about this and the 2 other concerns we've identified .
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.
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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.
