Amyris, Inc. (NASDAQ:AMRS) Just Reported, And Analysts Assigned A US$10.91 Price Target

The analysts might have been a bit too bullish on Amyris, Inc. (NASDAQ:AMRS), given that the company fell short of expectations when it released its quarterly results last week. It was not a great result overall, as revenues of US$65m fell 20% short of analyst expectations. Unsurprisingly, statutory losses ended up being17% larger than the analysts expected, at US$0.34 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Amyris

Following the latest results, Amyris' eight analysts are now forecasting revenues of US$350.2m in 2022. This would be a substantial 49% improvement in sales compared to the last 12 months. Per-share losses are supposed to see a sharp uptick, reaching US$0.77. Before this latest report, the consensus had been expecting revenues of US$363.1m and US$0.85 per share in losses. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrade to loss per share forecasts for this year.

The analysts have cut their price target 7.3% to US$10.91per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Amyris analyst has a price target of US$22.00 per share, while the most pessimistic values it at US$2.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Amyris' rate of growth is expected to accelerate meaningfully, with the forecast 121% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 28% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 2.6% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Amyris 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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Yet - earnings are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Amyris going out to 2024, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 5 warning signs for Amyris (of which 3 are concerning!) 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.