Yahoo Finance Zymeworks Inc. (NASDAQ:ZYME) Consensus Forecasts Have Become A Little Darker Since Its Latest Report
Zymeworks Inc. (NASDAQ:ZYME) just released its latest quarterly report and things are not looking great. It was not a great statutory result, with revenues coming in 39% lower than the analysts predicted. Unsurprisingly, earnings also fell seriously short of forecasts, turning into a per-share loss of US$0.42. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. 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 Zymeworks
Following the latest results, Zymeworks' seven analysts are now forecasting revenues of US$82.2m in 2024. This would be a sizeable 63% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 23% to US$1.37. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$88.9m and losses of US$1.12 per share in 2024. So it's pretty clear the analysts have mixed opinions on Zymeworks after this update; revenues were downgraded and per-share losses expected to increase.
There was no major change to the consensus price target of US$13.72, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Zymeworks analyst has a price target of US$20.00 per share, while the most pessimistic values it at US$10.00. 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.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Zymeworks' rate of growth is expected to accelerate meaningfully, with the forecast 92% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 48% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 18% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Zymeworks is expected to grow much faster than its industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Zymeworks. They also downgraded Zymeworks' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. The consensus price target held steady at US$13.72, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Zymeworks analysts - going out to 2026, and you can see them free on our platform here.
Even so, be aware that Zymeworks is showing 2 warning signs in our investment analysis , 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.
