Celebrations may be in order for Beam Therapeutics Inc. (NASDAQ:BEAM) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. The market seems to be pricing in some improvement in the business too, with the stock up 8.2% over the past week, closing at US$21.14. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.
Following the upgrade, the current consensus from Beam Therapeutics' 14 analysts is for revenues of US$97m in 2023 which - if met - would reflect a substantial 20% increase on its sales over the past 12 months. Losses are expected to increase substantially, hitting US$4.48 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$78m and losses of US$5.04 per share in 2023. 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.
View our latest analysis for Beam Therapeutics
There was no major change to the consensus price target of US$54.38, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Beam Therapeutics' revenue growth is expected to slow, with the forecast 45% annualised growth rate until the end of 2023 being well below the historical 91% 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) 15% per year. Even after the forecast slowdown in growth, it seems obvious that Beam Therapeutics is also expected to grow faster than the wider industry.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Beam 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. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Beam Therapeutics could be a good candidate for more research.
Analysts are clearly in love with Beam Therapeutics at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as dilutive stock issuance over the past year. You can learn more, and discover the 2 other flags we've identified, for free on our platform here.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.