Talis Biomedical Corporation (NASDAQ:TLIS) Just Reported First-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

It's been a sad week for Talis Biomedical Corporation (NASDAQ:TLIS), who've watched their investment drop 16% to US$9.77 in the week since the company reported its quarterly result. Revenues came in 30% better than analyst models expected, at US$7.0m, although statutory losses ballooned 489% to US$4.61, which is much worse than what was forecast. 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 Talis Biomedical

After the latest results, the four analysts covering Talis Biomedical are now predicting revenues of US$77.5m in 2021. If met, this would reflect a major 342% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 90% to US$3.00. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$75.7m and losses of US$1.74 per share in 2021. While this year's revenue estimates increased, there was also a massive increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

There was no major change to the consensus price target of US$16.25, with growing revenues seemingly enough to offset the concern of growing losses. 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 Talis Biomedical at US$18.00 per share, while the most bearish prices it at US$13.00. 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 Talis Biomedical shareholders.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Talis Biomedical's growth to accelerate, with the forecast 6x annualised growth to the end of 2021 ranking favourably alongside historical growth of 161% per annum over the past year. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.8% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Talis Biomedical to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Talis Biomedical. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Talis Biomedical going out to 2024, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for Talis Biomedical that we have uncovered.

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