Yahoo Finance Arvinas, Inc. (NASDAQ:ARVN) Just Reported First-Quarter Earnings And Analysts Are Lifting Their Estimates
Shareholders might have noticed that Arvinas, Inc. (NASDAQ:ARVN) filed its quarterly result this time last week. The early response was not positive, with shares down 4.2% to US$31.44 in the past week. Statutory results overall were mixed, with revenues coming in 21% lower than the analysts predicted. What's really surprising is that losses of US$0.97 per share were 28% smaller than what was predicted. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Arvinas after the latest results.
See our latest analysis for Arvinas
Taking into account the latest results, the most recent consensus for Arvinas from 18 analysts is for revenues of US$170.0m in 2024. If met, it would imply a huge 138% increase on its revenue over the past 12 months. Losses are supposed to decline, shrinking 13% from last year to US$4.52. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$153.8m and losses of US$5.37 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 this year's revenue estimates, while at the same time reducing their loss estimates.
Despite these upgrades,the analysts have not made any major changes to their price target of US$69.06, implying that their latest estimates don't have a long term impact on what they think the stock is worth. 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. The most optimistic Arvinas analyst has a price target of US$110 per share, while the most pessimistic values it at US$38.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
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. The analysts are definitely expecting Arvinas' growth to accelerate, with the forecast 218% annualised growth to the end of 2024 ranking favourably alongside historical growth of 36% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.4% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Arvinas is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. 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 Arvinas. Long-term earnings power is much more important than next year's profits. We have forecasts for Arvinas going out to 2026, and you can see them free on our platform here.
Before you take the next step you should know about the 3 warning signs for Arvinas that we have uncovered.
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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.
