Vir Biotechnology, Inc. (NASDAQ:VIR) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. Vir Biotechnology has also found favour with investors, with the stock up an impressive 24% to US$10.39 over the past week. Could this upgrade be enough to drive the stock even higher?

Following the latest upgrade, the current consensus, from the seven analysts covering Vir Biotechnology, is for revenues of US$69m in 2024, which would reflect a not inconsiderable 14% reduction in Vir Biotechnology's sales over the past 12 months. The loss per share is expected to ameliorate slightly, reducing to US$3.70. However, before this estimates update, the consensus had been expecting revenues of US$41m and US$4.20 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.

Despite these upgrades, the analysts have not made any major changes to their price target of US$29.75, implying that their latest estimates don't have a long term impact on what they think the stock is worth.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 18% by the end of 2024. This indicates a significant reduction from annual growth of 35% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 18% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Vir Biotechnology is expected to lag the wider industry.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Vir Biotechnology is moving incrementally towards profitability. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Vir Biotechnology.

Analysts are clearly in love with Vir Biotechnology at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as recent substantial insider selling. For more information, you can click through to our platform to learn more about this and the 2 other risks we've identified .

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.

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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.