Sema4 Holdings Corp. (NASDAQ:SMFR) Analysts Are Cutting Their Estimates: Here's What You Need To Know

As you might know, Sema4 Holdings Corp. (NASDAQ:SMFR) last week released its latest quarterly, and things did not turn out so great for shareholders. It looks to have been a weak result overall, as sales of US$36m were 46% less than the analysts expected. Unsurprisingly, losses were also somewhat larger than was modelled, at US$0.25 per share. 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.

Check out our latest analysis for Sema4 Holdings

After the latest results, the four analysts covering Sema4 Holdings are now predicting revenues of US$241.9m in 2022. If met, this would reflect a substantial 27% improvement in sales compared to the last 12 months. Losses are forecast to balloon 151% to US$1.12 per share. Before this latest report, the consensus had been expecting revenues of US$305.6m and US$0.97 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 fell 24% to US$3.25, implicitly signalling that lower earnings per share are a leading indicator for Sema4 Holdings' valuation. 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 Sema4 Holdings analyst has a price target of US$5.00 per share, while the most pessimistic values it at US$2.00. 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. One thing stands out from these estimates, which is that Sema4 Holdings is forecast to grow faster in the future than it has in the past, with revenues expected to display 60% annualised growth until the end of 2022. If achieved, this would be a much better result than the 11% annual decline over the past year. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 7.1% annually. So it looks like Sema4 Holdings is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. They also downgraded their revenue estimates, although industry data suggests that Sema4 Holdings' revenues are 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 Sema4 Holdings' future valuation.

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 Sema4 Holdings going out to 2024, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 4 warning signs for Sema4 Holdings (3 are a bit concerning) you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.