Arvinas, Inc. (NASDAQ:ARVN) last week reported its latest first-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Statutory results overall were mixed, with revenues coming in 21% lower than the analysts predicted. What's really surprising is that losses of US$0.97 per share were 28% smaller than what was predicted. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Taking into account the latest results, the current consensus from Arvinas' 18 analysts is for revenues of US$135.4m in 2024. This would reflect a substantial 90% increase on its revenue over the past 12 months. Losses are supposed to decline, shrinking 13% from last year to US$4.53. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$153.8m and losses of US$5.37 per share in 2024. We can see there's definitely been a change in sentiment in this update, with the analysts administering a meaningful downgrade to next year's revenue estimates, while at the same time reducing their loss estimates.

There was no major change to the US$69.06average price target, suggesting that the adjustments to revenue and earnings are not expected to have a long-term impact on the business. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Arvinas, with the most bullish analyst valuing it at US$110 and the most bearish at US$38.00 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. 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.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Arvinas' growth to accelerate, with the forecast 135% annualised growth to the end of 2024 ranking favourably alongside historical growth of 36% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.3% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Arvinas to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Still, earnings per share are more important to value creation for shareholders. 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 Arvinas. Long-term earnings power is much more important than next year's profits. We have forecasts for Arvinas going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 3 warning signs we've spotted with Arvinas .

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