Codiak BioSciences, Inc. (NASDAQ:CDAK) Just Reported Second-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

The investors in Codiak BioSciences, Inc.'s (NASDAQ:CDAK) will be rubbing their hands together with glee today, after the share price leapt 25% to US$21.62 in the week following its quarterly results. Revenues fell badly short of expectations, with sales of US$890k being some 34% below what the analysts had forecast. Statutory losses were in line with forecasts, with Codiak BioSciences losing US$0.99 a 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'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 Codiak BioSciences

Taking into account the latest results, Codiak BioSciences' three analysts currently expect revenues in 2021 to be US$16.9m, approximately in line with the last 12 months. Losses are predicted to fall substantially, shrinking 41% to US$3.43. Before this earnings announcement, the analysts had been modelling revenues of US$17.2m and losses of US$3.55 per share in 2021. 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$36.67, 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. The most optimistic Codiak BioSciences analyst has a price target of US$45.00 per share, while the most pessimistic values it at US$31.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Codiak BioSciences' revenue growth is expected to slow, with the forecast 3.0% annualised growth rate until the end of 2021 being well below the historical 2,581% growth over the last year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 10% per year. Factoring in the forecast slowdown in growth, it seems obvious that Codiak BioSciences is also expected to grow slower than other industry participants.

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 sales are tracking in line with expectations - although our data does suggest that Codiak BioSciences' revenues are expected to 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 Codiak BioSciences going out to 2023, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 3 warning signs for Codiak BioSciences you should be aware of, and 1 of them shouldn't be ignored.

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This article by Simply Wall St is general in nature. 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.
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