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Shareholders in 2seventy bio, Inc. (NASDAQ:TSVT) had a terrible week, as shares crashed 22% to US$3.92 in the week since its latest quarterly results. Revenues of US$14m came in a modest 7.0% below forecasts. Statutory losses were a relative bright spot though, with a per-share loss of US$0.19 coming in a substantial 21% smaller than what the analysts had expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for 2seventy bio
Taking into account the latest results, the consensus forecast from 2seventy bio's five analysts is for revenues of US$74.0m in 2025. This reflects a sizeable 62% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 76% to US$0.45. Before this latest report, the consensus had been expecting revenues of US$76.3m and US$0.44 per share in losses. Overall it looks as though the analysts are negative in this update. Although revenue forecasts held steady, the consensus also made a moderate increase in to its losses per share forecasts.
The average price target fell 23% to US$8.25, implicitly signalling that lower earnings per share are a leading indicator for 2seventy bio's valuation. 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 2seventy bio analyst has a price target of US$15.00 per share, while the most pessimistic values it at US$2.00. 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. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. For example, we noticed that 2seventy bio's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 47% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 6.2% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 22% per year. Not only are 2seventy bio's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.