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Arcus Biosciences, Inc. (NYSE:RCUS) investors will be delighted, with the company turning in some strong numbers with its latest results. The results were impressive, with revenues of US$145m exceeding analyst forecasts by 404%, and statutory losses of US$0.05 were likewise much smaller than the analysts had forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
View our latest analysis for Arcus Biosciences
Taking into account the latest results, the consensus forecast from Arcus Biosciences' nine analysts is for revenues of US$284.1m in 2024. This reflects a notable 20% improvement in revenue compared to the last 12 months. Losses are forecast to balloon 28% to US$3.26 per share. Before this latest report, the consensus had been expecting revenues of US$187.4m and US$3.85 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.
Despite these upgrades,the analysts have not made any major changes to their price target of US$39.11, implying that their latest estimates don't have a long term impact on what they think the stock is worth. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Arcus Biosciences, with the most bullish analyst valuing it at US$70.00 and the most bearish at US$24.00 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Arcus Biosciences' revenue growth is expected to slow, with the forecast 27% annualised growth rate until the end of 2024 being well below the historical 35% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 18% per year. So it's pretty clear that, while Arcus Biosciences' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.