Analysts Have Been Trimming Their Compugen Ltd. (NASDAQ:CGEN) Price Target After Its Latest Report

Compugen Ltd. (NASDAQ:CGEN) just released its first-quarter report and things are looking bullish. The results were impressive, with revenues of US$2.6m exceeding analyst forecasts by 111%, and statutory losses of US$0.08 were likewise much smaller than the analysts had forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. 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 Compugen

Taking into account the latest results, the current consensus from Compugen's twin analysts is for revenues of US$37.0m in 2024. This would reflect a satisfactory 2.8% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 73% to US$0.05. Before this latest report, the consensus had been expecting revenues of US$37.9m and US$0.13 per share in losses. While the revenue estimates fell, sentiment seems to have improved, with the analysts making a very promising decrease in losses per share in particular.

The analysts have cut their price target 6.2% to US$5.00per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Compugen's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.8% growth on an annualised basis. This is compared to a historical growth rate of 54% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 18% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Compugen.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Compugen's future valuation.

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

Plus, you should also learn about the 4 warning signs we've spotted with Compugen (including 1 which is significant) .

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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.