AbCellera Biologics Inc. (NASDAQ:ABCL) Just Reported And Analysts Have Been Cutting Their Estimates

It's shaping up to be a tough period for AbCellera Biologics Inc. (NASDAQ:ABCL), which a week ago released some disappointing third-quarter results that could have a notable impact on how the market views the stock. Unfortunately, AbCellera Biologics delivered a serious earnings miss. Revenues of US$6.5m were 19% below expectations, and statutory losses ballooned 31% to US$0.17 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for AbCellera Biologics

Taking into account the latest results, the consensus forecast from AbCellera Biologics' ten analysts is for revenues of US$45.0m in 2025. This reflects a substantial 37% improvement in revenue compared to the last 12 months. Per-share losses are predicted to creep up to US$0.65. Before this earnings announcement, the analysts had been modelling revenues of US$50.5m and losses of US$0.65 per share in 2025. So there's definitely been a change in sentiment in this update, with the analysts administering a substantial haircut to next year's revenue estimates, while at the same time holding losses per share steady.

The analysts have cut their price target 12% to US$12.29per share, signalling that the declining revenue and ongoing losses are contributing to the lower 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 AbCellera Biologics at US$28.00 per share, while the most bearish prices it at US$5.00. 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. For example, we noticed that AbCellera Biologics' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 28% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 5.9% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 6.4% per year. So it looks like AbCellera Biologics 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 reconfirmed their loss per share estimates for next year. They also downgraded AbCellera Biologics' revenue estimates, but industry data suggests that it is 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 AbCellera Biologics' future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for AbCellera Biologics going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for AbCellera Biologics that 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.