Yahoo Finance Earnings Release: Here's Why Analysts Cut Their AbCellera Biologics Inc. (NASDAQ:ABCL) Price Target To US$12.71
It's been a good week for AbCellera Biologics Inc. (NASDAQ:ABCL) shareholders, because the company has just released its latest first-quarter results, and the shares gained 2.6% to US$3.95. It was a moderately negative result overall - revenue fell 9.6% short of analyst estimates at US$10.0m, although at least statutory losses were marginally smaller than expected, at US$0.14 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for AbCellera Biologics
Taking into account the latest results, the most recent consensus for AbCellera Biologics from nine analysts is for revenues of US$40.0m in 2024. If met, it would imply a notable 12% increase on its revenue over the past 12 months. Per-share losses are supposed to see a sharp uptick, reaching US$0.57. Before this earnings announcement, the analysts had been modelling revenues of US$47.8m and losses of US$0.61 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue forecasts while also reducing the estimated losses the business will incur.
The consensus price target fell 14% to US$12.71, with the dip in revenue estimates clearly souring sentiment, despite the forecast reduction in 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. Currently, the most bullish analyst values AbCellera Biologics at US$20.00 per share, while the most bearish prices it at US$7.00. 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. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the AbCellera Biologics' past performance and to peers in the same industry. One thing stands out from these estimates, which is that AbCellera Biologics is forecast to grow faster in the future than it has in the past, with revenues expected to display 16% annualised growth until the end of 2024. If achieved, this would be a much better result than the 49% annual decline over the past three years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.5% annually. So it looks like AbCellera Biologics is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple AbCellera Biologics analysts - 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 AbCellera Biologics that we have uncovered.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
