Cerus Corporation (NASDAQ:CERS) Just Reported Earnings, And Analysts Cut Their Target Price

It's been a mediocre week for Cerus Corporation (NASDAQ:CERS) shareholders, with the stock dropping 11% to US$1.65 in the week since its latest yearly results. It was a moderately negative result overall - revenue fell 7.0% short of analyst estimates at US$180m, and statutory losses were in line with analyst expectations, at US$0.11 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Cerus

Taking into account the latest results, the consensus forecast from Cerus' five analysts is for revenues of US$205.1m in 2025. This reflects a meaningful 14% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 47% to US$0.06. Before this earnings announcement, the analysts had been modelling revenues of US$209.1m and losses of US$0.075 per share in 2025. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a cut to losses per share in particular.

The consensus price target fell 13% to US$3.90despite the forecast for smaller losses next year. It looks like the ongoing lack of profitability is starting to weigh on valuations. 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 Cerus, with the most bullish analyst valuing it at US$5.00 and the most bearish at US$2.50 per share. 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. We can infer from the latest estimates that forecasts expect a continuation of Cerus'historical trends, as the 14% annualised revenue growth to the end of 2025 is roughly in line with the 17% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 7.9% per year. So although Cerus is expected to maintain its revenue growth rate, it's definitely expected to grow faster than 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Cerus' future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Cerus. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Cerus analysts - going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for Cerus 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.