Alector, Inc. (NASDAQ:ALEC) First-Quarter Results: Here's What Analysts Are Forecasting For This Year

Shareholders might have noticed that Alector, Inc. (NASDAQ:ALEC) filed its first-quarter result this time last week. The early response was not positive, with shares down 2.6% to US$5.25 in the past week. Revenues of US$16m arrived in line with expectations, although statutory losses per share were US$0.38, an impressive 29% smaller than what broker models predicted. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Alector

Taking into account the latest results, the nine analysts covering Alector provided consensus estimates of US$63.2m revenue in 2024, which would reflect a disturbing 34% decline over the past 12 months. Per-share losses are expected to explode, reaching US$2.03 per share. Before this latest report, the consensus had been expecting revenues of US$62.3m and US$2.14 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.

There's been no major changes to the consensus price target of US$15.56, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Alector, with the most bullish analyst valuing it at US$35.00 and the most bearish at US$4.00 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 43% by the end of 2024. This indicates a significant reduction from annual growth of 31% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 19% per year. It's pretty clear that Alector's revenues are expected to perform substantially worse 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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Alector's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$15.56, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Alector. Long-term earnings power is much more important than next year's profits. We have forecasts for Alector 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 3 warning signs for Alector 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.