Yahoo Finance Need To Know: Analysts Are Much More Bullish On Nektar Therapeutics (NASDAQ:NKTR) Revenues
Celebrations may be in order for Nektar Therapeutics (NASDAQ:NKTR) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts have sharply increased their revenue numbers, with a view that Nektar Therapeutics will make substantially more sales than they'd previously expected.
After the upgrade, the 14 analysts covering Nektar Therapeutics are now predicting revenues of US$161m in 2020. If met, this would reflect a major 41% improvement in sales compared to the last 12 months. Per-share losses are expected to creep up to US$2.63. However, before this estimates update, the consensus had been expecting revenues of US$144m and US$2.70 per share in losses. 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.
See our latest analysis for Nektar Therapeutics
Despite these upgrades, the analysts have not made any major changes to their price target of US$30.31, implying that their latest estimates don't have a long term impact on what they think the stock is worth. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Nektar Therapeutics analyst has a price target of US$80.00 per share, while the most pessimistic values it at US$18.00. With such a wide range in price targets, the analysts are almost certainly betting on widely diverse outcomes for the underlying business. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Nektar Therapeutics'growth to accelerate, with the forecast 41% growth ranking favourably alongside historical growth of 26% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.0% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Nektar 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 Nektar Therapeutics is moving incrementally towards profitability. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Nektar Therapeutics.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Nektar Therapeutics analysts - going out to 2024, and you can see them 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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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