There’s been a notable change in appetite for Vir Biotechnology, Inc. (NASDAQ:VIR) shares in the week since its first-quarter report, with the stock down 10% to US$9.12. Revenues fell badly short of expectations, with revenue of -US$29k missing analyst predictions by 100%. Statutory earnings correspondingly nosedived, with Vir Biotechnology reporting a loss of US$0.85 per share, where the analysts were expecting a profit. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the five analysts covering Vir Biotechnology are now predicting revenues of US$249.4m in 2026. If met, this would reflect a sizeable 281% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 45% to US$1.45. Before this latest report, the consensus had been expecting revenues of US$244.0m and US$1.39 per share in losses. So it’s pretty clear consensus is mixed on Vir Biotechnology after the new consensus numbers; while the analysts lifted revenue numbers, they also administered a moderate increase in per-share loss expectations.
See our latest analysis for Vir Biotechnology
There was no major change to the consensus price target of US$20.56, with growing revenues seemingly enough to offset the concern of growing losses. The consensus price target is just an average of individual analyst targets, so – it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Vir Biotechnology, with the most bullish analyst valuing it at US$30.00 and the most bearish at US$16.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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. One thing stands out from these estimates, which is that Vir Biotechnology is forecast to grow faster in the future than it has in the past, with revenues expected to display 5x annualised growth until the end of 2026. If achieved, this would be a much better result than the 46% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 22% annually. Not only are Vir Biotechnology’s 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 to note is the forecast of increased losses next year, suggesting all may not be well at Vir Biotechnology. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at US$20.56, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. We have forecasts for Vir Biotechnology going out to 2028, and you can see them free on our platform here.
And what about risks? Every company has them, and we’ve spotted 5 warning signs for Vir Biotechnology (of which 1 is potentially serious!) you should know about.
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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.