Altimmune, Inc. (NASDAQ:ALT) Third-Quarter Results: Here's What Analysts Are Forecasting For Next Year

Altimmune, Inc. (NASDAQ:ALT) defied analyst predictions to release its third-quarter results, which were ahead of market expectations. The results were impressive, with revenues of US$2.9m exceeding analyst forecasts by 180%, and statutory losses of US$0.54 were likewise much smaller than the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Altimmune

Taking into account the latest results, the consensus forecast from Altimmune's four analysts is for revenues of US$302.6m in 2021, which would reflect a major 4,593% improvement in sales compared to the last 12 months. Altimmune is also expected to turn profitable, with statutory earnings of US$3.28 per share. Before this earnings report, the analysts had been forecasting revenues of US$273.6m and earnings per share (EPS) of US$3.69 in 2021. Although sales sentiment has improved substantially, the analysts have made a substantial drop in per-share earnings estimates, suggesting that the growth is not without cost.

There's been no major changes to the price target of US$48.25, suggesting that the impact of higher forecast sales and lower earnings won't result in a meaningful change to the business' valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Altimmune, with the most bullish analyst valuing it at US$80.00 and the most bearish at US$28.00 per share. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Altimmune's rate of growth is expected to accelerate meaningfully, with the forecast exponential revenue growth noticeably faster than its historical growth of 6.6%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 21% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Altimmune to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Altimmune. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Altimmune. Long-term earnings power is much more important than next year's profits. We have forecasts for Altimmune going out to 2024, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Altimmune (of which 1 is significant!) you should know about.

This article by Simply Wall St is general in nature. 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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