Beam Therapeutics Inc. (NASDAQ:BEAM) Analysts Are Cutting Their Estimates: Here's What You Need To Know

Shareholders of Beam Therapeutics Inc. (NASDAQ:BEAM) will be pleased this week, given that the stock price is up 17% to US$74.20 following its latest annual results. Revenues came in 310% better than analyst models expected, at US$52mwhile statutory losses per share were US$5.77, in line with forecasts. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Beam Therapeutics

Following the recent earnings report, the consensus from ten analysts covering Beam Therapeutics is for revenues of US$22.6m in 2022, implying a sizeable 56% decline in sales compared to the last 12 months. Losses are supposed to decline, shrinking 18% from last year to US$4.52. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$49.2m and losses of US$3.46 per share in 2022. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.

There was no major change to the consensus price target of US$122, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. 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 Beam Therapeutics at US$154 per share, while the most bearish prices it at US$80.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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 sales are expected to slow, with a forecast annualised revenue decline of 56% by the end of 2022. This indicates a significant reduction from annual growth of 171% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 12% per year. It's pretty clear that Beam Therapeutics' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Beam Therapeutics. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse 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.

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

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Beam Therapeutics (at least 1 which shouldn't be ignored) , and understanding these should be part of your investment process.

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.