It's been a mediocre week for Alvotech (NASDAQ:ALVO) shareholders, with the stock dropping 17% to US$9.55 in the week since its latest yearly results. The results don't look great, especially considering that statutory losses grew 65% toUS$0.87 per share. Revenues of US$492m did beat expectations by 8.3%, but it looks like a bit of a cold comfort. 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.

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Taking into account the latest results, the current consensus from Alvotech's four analysts is for revenues of US$599.6m in 2025. This would reflect a sizeable 22% increase on its revenue over the past 12 months. Earnings are expected to improve, with Alvotech forecast to report a statutory profit of US$0.18 per share. Before this earnings report, the analysts had been forecasting revenues of US$612.1m and earnings per share (EPS) of US$0.15 in 2025. Although the analysts have lowered their revenue forecasts, they've also made a sizeable expansion in their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.

See our latest analysis for Alvotech

There's been a 6.3% lift in the price target to US$18.50, with the analysts signalling that the higher earnings forecasts are more relevant to the business than the weaker revenue estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Alvotech at US$28.00 per share, while the most bearish prices it at US$14.00. 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.

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 Alvotech's revenue growth is expected to slow, with the forecast 22% annualised growth rate until the end of 2025 being well below the historical 45% p.a. growth over the last five years. Compare this to the 565 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 20% per year. Factoring in the forecast slowdown in growth, it looks like Alvotech is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Alvotech's earnings potential next year. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. Even so, earnings are more important to the intrinsic value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Alvotech. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Alvotech going out to 2027, and you can see them free on our platform here..

You still need to take note of risks, for example - Alvotech has 2 warning signs (and 1 which is concerning) we think 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.