Shareholders in Capricor Therapeutics, Inc. (NASDAQ:CAPR) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. Investor sentiment seems to be improving too, with the share price up 8.5% to US$6.39 over the past 7 days. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.
Following the latest upgrade, the four analysts covering Capricor Therapeutics provided consensus estimates of US$21m revenue in 2024, which would reflect a not inconsiderable 15% decline on its sales over the past 12 months. Losses are supposed to balloon 36% to US$0.96 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$15m and losses of US$1.20 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 12% to US$21.00, with the analysts encouraged by the higher revenue and lower forecast losses for this year.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 15% by the end of 2024. This indicates a significant reduction from annual growth of 71% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 17% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Capricor Therapeutics is expected to lag the wider industry.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Capricor Therapeutics is moving incrementally towards profitability. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Capricor Therapeutics could be worth investigating further.
It's great to see the analysts upgrading their estimates, but the biggest highlight to us is that the business is expected to become profitable in the foreseeable future. You can learn more about these forecasts, 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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