C4 Therapeutics, Inc. (NASDAQ:CCCC) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance. C4 Therapeutics has also found favour with investors, with the stock up a worthy 25% to US$9.51 over the past week. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.
Following the upgrade, the current consensus from C4 Therapeutics' eight analysts is for revenues of US$27m in 2024 which - if met - would reflect a substantial 28% increase on its sales over the past 12 months. Losses are forecast to hold steady at around US$1.91 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$22m and losses of US$2.37 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.
It will come as no surprise to learn that the analysts have increased their price target for C4 Therapeutics 8.0% to US$16.00 on the back of these upgrades.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the C4 Therapeutics' past performance and to peers in the same industry. It's clear from the latest estimates that C4 Therapeutics' rate of growth is expected to accelerate meaningfully, with the forecast 28% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 1.9% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 17% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that C4 Therapeutics is expected to grow much faster than its industry.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting C4 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. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, C4 Therapeutics could be worth investigating further.
These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 3 potential flags with C4 Therapeutics, including 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.
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