Biocept, Inc. (NASDAQ:BIOC) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year’s forecasts. The revenue forecast for next year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline. Investor sentiment seems to be improving too, with the share price up 7.4% to US$4.78 over the past 7 days. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.
Following the upgrade, the most recent consensus for Biocept from its twin analysts is for revenues of US$30m in 2021 which, if met, would be a sizeable 435% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 68% to US$1.32. However, before this estimates update, the consensus had been expecting revenues of US$19m and US$1.37 per share in losses. 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.
Despite these upgrades, the analysts have not made any major changes to their price target of US$20.00, implying that their latest estimates don’t have a long term impact on what they think the stock is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Biocept’s growth to accelerate, with the forecast 4x growth ranking favourably alongside historical growth of 28% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 21% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Biocept to grow faster than the wider industry.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses next year, perhaps suggesting Biocept is moving incrementally towards profitability. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better 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 Biocept.
Analysts are definitely bullish on Biocept, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including major dilution from new stock issuance in the past year. You can learn more, and discover the 2 other flags we’ve identified, for free on our platform here.
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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.