The analysts might have been a bit too bullish on Vir Biotechnology, Inc. (NASDAQ:VIR), given that the company fell short of expectations when it released its third-quarter results last week. Statutory earnings fell substantially short of expectations, with revenues of US$2.4m missing forecasts by 57%. Losses exploded, with a per-share loss of US$1.56 some 63% below prior forecasts. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Vir Biotechnology

After the latest results, the consensus from Vir Biotechnology's eight analysts is for revenues of US$30.4m in 2025, which would reflect a sizeable 61% decline in revenue compared to the last year of performance. Losses are forecast to narrow 8.2% to US$3.58 per share. Before this latest report, the consensus had been expecting revenues of US$32.5m and US$3.60 per share in losses.

The consensus price target was broadly unchanged at US$29.88, implying that the business is performing roughly in line with expectations, despite a downwards adjustment to forecast revenue next year. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Vir Biotechnology analyst has a price target of US$110 per share, while the most pessimistic values it at US$10.00. 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. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 53% annualised decline to the end of 2025. That is a notable change from historical growth of 14% 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 21% 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 most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. 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 Vir Biotechnology. Long-term earnings power is much more important than next year's profits. We have forecasts for Vir Biotechnology going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Vir Biotechnology that we have uncovered.

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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.