US$8.40: That's What Analysts Think Carisma Therapeutics, Inc. (NASDAQ:CARM) Is Worth After Its Latest Results

Carisma Therapeutics, Inc. (NASDAQ:CARM) just released its latest quarterly report and things are not looking great. Revenues came in at US$3.4m, missing analyst expectations by 17%. Statutory losses per share fell slightly short, coming in at US$0.46, 6.4% below what the analysts had predicted. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Carisma Therapeutics

Taking into account the latest results, the current consensus from Carisma Therapeutics' four analysts is for revenues of US$16.1m in 2024. This would reflect a reasonable 6.6% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 43% to US$1.11. Before this latest report, the consensus had been expecting revenues of US$16.9m and US$2.13 per share in losses. While the revenue estimates fell, sentiment seems to have improved, with the analysts making a considerable decrease in losses per share in particular.

The analysts have cut their price target 12% to US$8.40per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in 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. The most optimistic Carisma Therapeutics analyst has a price target of US$10.00 per share, while the most pessimistic values it at US$6.00. 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 Carisma Therapeutics shareholders.

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. We would highlight that Carisma Therapeutics' revenue growth is expected to slow, with the forecast 8.9% annualised growth rate until the end of 2024 being well below the historical 23% growth over the last year. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 18% annually. Factoring in the forecast slowdown in growth, it seems obvious that Carisma Therapeutics is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, long term profitability is more important for the value creation process. 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Carisma Therapeutics going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 4 warning signs for Carisma Therapeutics that we have uncovered.

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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.