Yahoo Finance SOPHiA GENETICS SA (NASDAQ:SOPH) Just Reported, And Analysts Assigned A US$17.50 Price Target
There's been a notable change in appetite for SOPHiA GENETICS SA (NASDAQ:SOPH) shares in the week since its yearly report, with the stock down 15% to US$8.65. The results overall were pretty much dead in line with analyst forecasts; revenues were US$40m and statutory losses were US$1.33 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for SOPHiA GENETICS
After the latest results, the three analysts covering SOPHiA GENETICS are now predicting revenues of US$52.8m in 2022. If met, this would reflect a major 31% improvement in sales compared to the last 12 months. Losses are forecast to balloon 26% to US$1.45 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$53.1m and losses of US$1.49 per share in 2022. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers were unchanged.
Even with the lower forecast losses, the analysts lowered their valuations, with the average price target falling 15% to US$17.50. It looks likethe analysts have become less optimistic about the overall business. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on SOPHiA GENETICS, with the most bullish analyst valuing it at US$18.00 and the most bearish at US$17.00 per share. This is a very narrow spread of estimates, implying either that SOPHiA GENETICS is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that SOPHiA GENETICS' revenue growth is expected to slow, with the forecast 31% annualised growth rate until the end of 2022 being well below the historical 42% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 13% per year. Even after the forecast slowdown in growth, it seems obvious that SOPHiA GENETICS is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for SOPHiA GENETICS going out to 2024, and you can see them free on our platform here..
You still need to take note of risks, for example - SOPHiA GENETICS has 3 warning signs (and 1 which is a bit 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.
