Stock Analysis

Transgene SA (EPA:TNG) Consensus Forecasts Have Become A Little Darker Since Its Latest Report

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Last week, you might have seen that Transgene SA (EPA:TNG) released its full-year result to the market. The early response was not positive, with shares down 2.7% to €2.00 in the past week. Revenues of €10m fell short of estimates by 14%, but statutory losses were relatively mild, coming in 3.9% smaller than the analysts expected, at €0.33 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Transgene

ENXTPA:TNG Earnings and Revenue Growth March 19th 2023

Following the latest results, Transgene's three analysts are now forecasting revenues of €13.5m in 2023. This would be a substantial 35% improvement in sales compared to the last 12 months. Per-share losses are expected to explode, reaching €0.42 per share. Before this latest report, the consensus had been expecting revenues of €15.8m and €0.37 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.

The average price target was broadly unchanged at €3.93, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. 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. Currently, the most bullish analyst values Transgene at €4.30 per share, while the most bearish prices it at €3.50. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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. It's clear from the latest estimates that Transgene's rate of growth is expected to accelerate meaningfully, with the forecast 35% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 15% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 26% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Transgene 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 Transgene. They also downgraded their revenue estimates, although industry data suggests that Transgene's revenues are expected to grow faster than the wider industry. The consensus price target held steady at €3.93, with the latest estimates not enough to have an impact on their price targets.

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 Transgene analysts - going out to 2025, and you can see them free on our platform here.

Even so, be aware that Transgene is showing 2 warning signs in our investment analysis , and 1 of those shouldn't be ignored...

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