Shareholders of Selecta Biosciences, Inc. (NASDAQ:SELB) will be pleased this week, given that the stock price is up 13% to US$4.27 following its latest annual results. Revenues were 53% better than analyst models forecast, at US$17m. Perhaps unsurprisingly, statutory losses were also slightly larger than expected, at US$0.68 per share, reflecting the higher costs which were likely incurred in generating that revenue. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Selecta Biosciences after the latest results.
View our latest analysis for Selecta Biosciences
Taking into account the latest results, the most recent consensus for Selecta Biosciences from seven analysts is for revenues of US$38.0m in 2021 which, if met, would be a substantial 129% increase on its sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 59% to US$0.28. Before this latest report, the consensus had been expecting revenues of US$37.2m and US$0.33 per share in losses. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a notable improvement in loss per share in particular.
The consensus price target rose 8.2% to US$7.67, with the analysts encouraged by the higher revenue and lower forecast losses for next year. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Selecta Biosciences analyst has a price target of US$13.00 per share, while the most pessimistic values it at US$3.00. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Selecta Biosciences' past performance and to peers in the same industry. It's clear from the latest estimates that Selecta Biosciences' rate of growth is expected to accelerate meaningfully, with the forecast 129% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 8.4% 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 18% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Selecta Biosciences is expected to grow much faster than its industry.