Mesoblast Limited (ASX:MSB) Consensus Forecasts Have Become A Little Darker Since Its Latest Report

Mesoblast Limited (ASX:MSB) just released its latest annual report and things are not looking great. It was a pretty negative result overall, with revenues of US$17m missing analyst predictions by 4.8%. Worse, the business reported a statutory loss of US$0.085 per share, much larger than the analysts had forecast prior to the result. 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.

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After the latest results, the six analysts covering Mesoblast are now predicting revenues of US$69.2m in 2026. If met, this would reflect a sizeable 303% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 54% to US$0.037. Before this latest report, the consensus had been expecting revenues of US$78.5m and US$0.034 per share in losses. There's been a definite change in sentiment in this update, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

Check out our latest analysis for Mesoblast

The average price target was broadly unchanged at AU$3.49, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. 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. The most optimistic Mesoblast analyst has a price target of AU$4.71 per share, while the most pessimistic values it at AU$2.70. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Mesoblast shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Mesoblast's past performance and to peers in the same industry. For example, we noticed that Mesoblast's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 3x growth to the end of 2026 on an annualised basis. That is well above its historical decline of 17% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 7.3% per year. Not only are Mesoblast's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider 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 Mesoblast. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 forecasts for Mesoblast going out to 2028, and you can see them free on our platform here.

We also provide an overview of the Mesoblast Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.