Shareholders in NGM Biopharmaceuticals, Inc. (NASDAQ:NGM) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts have sharply increased their revenue numbers, with a view that NGM Biopharmaceuticals will make substantially more sales than they'd previously expected.
Following the latest upgrade, the current consensus, from the five analysts covering NGM Biopharmaceuticals, is for revenues of US$66m in 2022, which would reflect an uncomfortable 15% reduction in NGM Biopharmaceuticals' sales over the past 12 months. Losses are supposed to balloon 25% to US$1.98 per share. However, before this estimates update, the consensus had been expecting revenues of US$41m and US$2.13 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.
View our latest analysis for NGM Biopharmaceuticals
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing that stands out from these estimates is that revenues are expected to keep falling until the end of 2022, roughly in line with the historical decline of 17% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 3.2% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect NGM Biopharmaceuticals to suffer worse than the wider industry.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting NGM Biopharmaceuticals is moving incrementally towards profitability. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at NGM Biopharmaceuticals.
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 NGM Biopharmaceuticals 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.
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