SpringWorks Therapeutics, Inc. (NASDAQ:SWTX) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.
Following the upgrade, the latest consensus from SpringWorks Therapeutics' seven analysts is for revenues of US$141m in 2024, which would reflect a substantial 433% improvement in sales compared to the last 12 months. Losses are forecast to hold steady at around US$4.59 per share. However, before this estimates update, the consensus had been expecting revenues of US$126m and US$4.87 per share in losses. 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.
There was no major change to the consensus price target of US$67.92, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that SpringWorks Therapeutics' rate of growth is expected to accelerate meaningfully, with the forecast 8x annualised revenue growth to the end of 2024 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 19% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect SpringWorks Therapeutics to grow faster than the wider industry.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting SpringWorks Therapeutics is moving incrementally towards profitability. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at SpringWorks Therapeutics.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple SpringWorks Therapeutics analysts - going out to 2026, 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.
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