Celebrations may be in order for Sutro Biopharma, Inc.( NASDAQ:STRO ) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline.
Following the latest upgrade, the current consensus, from the twelve analysts covering Sutro Biopharma, is for revenues of US$44m in 2026, which would reflect a concerning 56% reduction in Sutro Biopharma's sales over the past 12 months. Losses are forecast to narrow 2.4% to US$9.05 per share. However, before this estimates update, the consensus had been expecting revenues of US$30m and US$9.12 per share in losses. So there's definitely been a change in sentiment in this update, with the analysts upgrading this year's revenue estimates, while at the same time holding losses per share steady.
See our latest analysis for Sutro Biopharma
The consensus price target rose 31% to US$46.64, with the analysts encouraged by the improved revenue outlook even though the company remains lossmaking.
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. We would highlight that sales are expected to reverse, with a forecast 66% annualised revenue decline to the end of 2026. That is a notable change from historical growth of 15% 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 22% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Sutro Biopharma 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 Sutro Biopharma is moving incrementally towards profitability. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Sutro Biopharma.
These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 5 potential risks with Sutro Biopharma, including major dilution from new stock issuance in the past year. You can learn more, and discover the 2 other risks we've identified, for free on our platform here.
Of course, seeing company management invest large sums of moneyin 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 with high insider ownership .
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