In This Article:
Shareholders in Dynavax Technologies Corporation (NASDAQ:DVAX) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term 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. Dynavax Technologies has also found favour with investors, with the stock up a whopping 57% to US$10.27 over the past week. Could this upgrade be enough to drive the stock even higher?
After the upgrade, the three analysts covering Dynavax Technologies are now predicting revenues of US$172m in 2021. If met, this would reflect a substantial 359% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 79% to US$0.21. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$125m and losses of US$0.45 per share in 2021. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to next year's revenue estimates, while at the same time reducing their loss estimates.
View our latest analysis for Dynavax Technologies
Despite these upgrades, the analysts have not made any major changes to their price target of US$16.33, implying that their latest estimates don't have a long term impact on what they think the stock is worth. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Dynavax Technologies at US$20.00 per share, while the most bearish prices it at US$14.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Dynavax Technologies' past performance and to peers in the same industry. It's clear from the latest estimates that Dynavax Technologies' rate of growth is expected to accelerate meaningfully, with the forecast 4x revenue growth noticeably faster than its historical growth of 50% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 19% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Dynavax Technologies is expected to grow much faster than its industry.