Yahoo Finance Wave Life Sciences Ltd. (NASDAQ:WVE) Reported Earnings Last Week And Analysts Are Already Upgrading Their Estimates
Wave Life Sciences Ltd. (NASDAQ:WVE) defied analyst predictions to release its annual results, which were ahead of market expectations. Revenues beat expectations coming in atUS$113m, ahead of estimates by 8.9%. Statutory losses were somewhat smaller thanthe analysts expected, coming in at US$0.54 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for Wave Life Sciences
Taking into account the latest results, the current consensus, from the seven analysts covering Wave Life Sciences, is for revenues of US$71.7m in 2024. This implies a concerning 37% reduction in Wave Life Sciences' revenue over the past 12 months. Per-share losses are expected to explode, reaching US$0.96 per share. Before this earnings announcement, the analysts had been modelling revenues of US$63.7m and losses of US$0.95 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, withthe analysts noticeably increasing their revenue forecasts while also expecting losses per share to hold steady.
The consensus price target rose 16% to US$10.64, with the analysts encouraged by the improved revenue outlook even though the company remains lossmaking. 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. There are some variant perceptions on Wave Life Sciences, with the most bullish analyst valuing it at US$17.00 and the most bearish at US$5.00 per share. 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.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that revenue is expected to reverse, with a forecast 37% annualised decline to the end of 2024. That is a notable change from historical growth of 34% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 9.0% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Wave Life Sciences 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. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. 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 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 Wave Life Sciences going out to 2026, and you can see them free on our platform here..
It is also worth noting that we have found 4 warning signs for Wave Life Sciences (1 is a bit concerning!) that you need to take into consideration.
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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.
