VBI Vaccines Inc. (NASDAQ:VBIV) just released its latest third-quarter report and things are not looking great. It was a pretty negative result overall, with revenues of US$298k missing analyst predictions by 9.2%. Worse, the business reported a statutory loss of US$0.06 per share, much larger than the analysts had forecast prior to the result. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following the latest results, VBI Vaccines’ four analysts are now forecasting revenues of US$11.1m in 2021. This would be a huge 652% improvement in sales compared to the last 12 months. Losses are expected to increase slightly, to US$0.22 per share. Before this earnings announcement, the analysts had been modelling revenues of US$6.71m and losses of US$0.20 per share in 2021. Ergo, there’s been a clear change in sentiment, with the analysts lifting next year’s revenue estimates, while at the same time increasing their loss per share numbers to reflect the cost of achieving this growth.
There was no major change to the consensus price target of US$6.67, with growing revenues seemingly enough to offset the concern of growing losses. That’s not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic VBI Vaccines analyst has a price target of US$9.00 per share, while the most pessimistic values it at US$3.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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. It’s clear from the latest estimates that VBI Vaccines’ rate of growth is expected to accelerate meaningfully, with the forecast 7x revenue growth noticeably faster than its historical growth of 29%p.a. 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 20% per year. Factoring in the forecast acceleration in revenue, it’s pretty clear that VBI Vaccines is expected to grow much faster than its industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at VBI Vaccines. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. The consensus price target held steady at US$6.67, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. We have forecasts for VBI Vaccines going out to 2024, and you can see them free on our platform here.
Plus, you should also learn about the 4 warning signs we’ve spotted with VBI Vaccines .
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. 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.