Yahoo Finance Downgrade: Here's How Analysts See Dynavax Technologies Corporation (NASDAQ:DVAX) Performing In The Near Term
Today is shaping up negative for Dynavax Technologies Corporation (NASDAQ:DVAX) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon. The stock price has risen 7.2% to US$12.58 over the past week. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.
After the downgrade, the consensus from Dynavax Technologies' five analysts is for revenues of US$304m in 2023, which would reflect a concerning 59% decline in sales compared to the last year of performance. After this downgrade, the company is anticipated to report a loss of US$0.12 in 2023, a sharp decline from a profit over the last year. However, before this estimates update, the consensus had been expecting revenues of US$414m and US$0.044 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.
View our latest analysis for Dynavax Technologies
The consensus price target fell 6.5% to US$23.20, implicitly signalling that lower earnings per share are a leading indicator for Dynavax Technologies' valuation. 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. The most optimistic Dynavax Technologies analyst has a price target of US$28.00 per share, while the most pessimistic values it at US$20.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
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 sales are expected to reverse, with a forecast 51% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 80% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 15% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Dynavax Technologies is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for next year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Dynavax Technologies' revenues are expected to grow slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.
As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Dynavax Technologies' financials, such as dilutive stock issuance over the past year. Learn more, and discover the 1 other risk 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 downgrading 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.
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