Celebrations may be in order for Dynavax Technologies Corporation (NASDAQ:DVAX) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.
After this upgrade, Dynavax Technologies' four analysts are now forecasting revenues of US$117m in 2021. This would be a huge 210% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 50% to US$0.51. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$74m and losses of US$0.65 per share in 2021. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to next year's revenue estimates, while at the same time reducing their loss estimates.
See our latest analysis for Dynavax Technologies
Despite these upgrades, the analysts have not made any major changes to their price target of US$16.00, implying that their latest estimates don't have a long term impact on what they think the stock is worth. 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. There are some variant perceptions on Dynavax Technologies, with the most bullish analyst valuing it at US$20.00 and the most bearish at US$14.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Dynavax Technologies shareholders.
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. It's clear from the latest estimates that Dynavax Technologies' rate of growth is expected to accelerate meaningfully, with the forecast 210% revenue growth noticeably faster than its historical growth of 50% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 21% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Dynavax Technologies is expected to grow much faster than its 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 Dynavax Technologies' prospects. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Dynavax Technologies could be a good candidate for more research.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Dynavax Technologies analysts - going out to 2024, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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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