Selecta Biosciences, Inc. (NASDAQ:SELB) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year’s statutory forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company’s business prospects.
Following the upgrade, the current consensus from Selecta Biosciences’ six analysts is for revenues of US$37m in 2021 which – if met – would reflect a huge 231% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 58% to US$0.33. Yet before this consensus update, the analysts had been forecasting revenues of US$25m and losses of US$0.24 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 forecasts to reflect the cost of achieving this growth.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. For example, we noticed that Selecta Biosciences’ rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 231%, well above its historical decline of 6.3% a year over the past five years. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 21% next year. Not only are Selecta Biosciences’ revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for next year. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. More bullish expectations could be a signal for investors to take a closer look at Selecta Biosciences.
Analysts are clearly in love with Selecta Biosciences at the moment, but before diving in – you should be aware that we’ve identified some warning flags with the business, such as major dilution from new stock issuance in the past year. For more information, you can click through to our platform to learn more about this and the 2 other risks 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 that insiders are buying.
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.