Shareholders in Sutro Biopharma, Inc. (NASDAQ:STRO) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance.
Following the upgrade, the consensus from eight analysts covering Sutro Biopharma is for revenues of US$62m in 2021, implying a definite 9.5% decline in sales compared to the last 12 months. Per-share losses are expected to see a sharp uptick, reaching US$2.09. However, before this estimates update, the consensus had been expecting revenues of US$59m and US$2.14 per share in losses. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for both revenues and losses per share.
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 sales are expected to reverse, with a forecast 18% annualised revenue decline to the end of 2021. That is a notable change from historical growth of 18% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 10% per year. It's pretty clear that Sutro Biopharma's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around Sutro Biopharma's prospects. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. More bullish expectations could be a signal for investors to take a closer look at Sutro Biopharma.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Sutro Biopharma analysts - going out to 2023, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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