PTC Therapeutics, Inc. (NASDAQ:PTCT) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. PTC Therapeutics has also found favour with investors, with the stock up a notable 15% to US$38.85 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.
Following the latest upgrade, the twelve analysts covering PTC Therapeutics provided consensus estimates of US$749m revenue in 2024, which would reflect a not inconsiderable 19% decline on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 31% to US$5.20 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$672m and losses of US$5.76 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.
It will come as no surprise to learn that the analysts have increased their price target for PTC Therapeutics 22% to US$35.91 on the back of these upgrades.
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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 25% by the end of 2024. This indicates a significant reduction from annual growth of 26% 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 18% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - PTC 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 PTC Therapeutics is moving incrementally towards profitability. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at PTC Therapeutics.
Analysts are definitely bullish on PTC Therapeutics, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including dilutive stock issuance over the past year. For more information, you can click through to our platform to learn more about this and the 3 other warning signs we've identified .
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 backed by insiders.
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