Celebrations may be in order for Verve Therapeutics, Inc. (NASDAQ:VERV) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance. Verve Therapeutics has also found favour with investors, with the stock up a noteworthy 21% to US$16.29 over the past week. Could this upgrade be enough to drive the stock even higher?
After this upgrade, Verve Therapeutics' ten analysts are now forecasting revenues of US$17m in 2024. This would be a major 48% improvement in sales compared to the last 12 months. Losses are supposed to balloon 25% to US$2.98 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$9.3m and losses of US$3.40 per share in 2024. 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.
The consensus price target rose 5.1% to US$48.25, with the analysts encouraged by the higher revenue and lower forecast losses for this year.
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 Verve Therapeutics' revenue growth is expected to slow, with the forecast 48% annualised growth rate until the end of 2024 being well below the historical 134% p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 18% per year. So it's pretty clear that, while Verve Therapeutics' 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 Verve Therapeutics 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. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Verve Therapeutics.
Analysts are definitely bullish on Verve Therapeutics, 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. You can learn more, and discover the 3 other risks 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.
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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.
