Celebrations may be in order for Cytokinetics, Incorporated (NASDAQ:CYTK) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The revenue forecast for next year has experienced a facelift, with analysts now much more optimistic on its sales pipeline. The market may be pricing in some blue sky too, with the share price gaining 14% to US$17.59 in the last 7 days. It will be interesting to see if today's upgrade is enough to propel the stock even higher.
After the upgrade, the five analysts covering Cytokinetics are now predicting revenues of US$61m in 2021. If met, this would reflect a huge 226% improvement in sales compared to the last 12 months. Losses are expected to be contained, narrowing 14% from last year to US$2.04. Yet before this consensus update, the analysts had been forecasting revenues of US$53m and losses of US$2.16 per share in 2021. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.
View our latest analysis for Cytokinetics
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Cytokinetics' past performance and to peers in the same industry. For example, we noticed that Cytokinetics' rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 226%, well above its historical decline of 17% a year over the past five years. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 20% next year. Not only are Cytokinetics' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The most important thing here is that analysts reduced their loss per share estimates for next year, reflecting increased optimism around Cytokinetics' prospects. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. Seeing the dramatic upgrade to next year's forecasts, it might be time to take another look at Cytokinetics.
Analysts are clearly in love with Cytokinetics at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as dilutive stock issuance over the past year. You can learn more, and discover the 3 other flags we've identified, for free on our platform here.
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