Calyxt, Inc. Consensus Forecasts Have Become A Little Darker Since Its Latest Report

Shareholders in Calyxt, Inc. (NASDAQ:CLXT) had a terrible week, as shares crashed 31% to US$4.38 in the week since its latest yearly results. The results look positive overall; while revenues of US$7.3m were in line with analyst predictions, statutory losses were 4.0% smaller than expected, with Calyxt losing US$1.21 per share. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Calyxt

Taking into account the latest results, the current consensus from Calyxt's six analysts is for revenues of US$15.8m in 2020, which would reflect a sizeable 117% increase on its sales over the past 12 months. Statutory losses are expected to reduce, shrinking 17% from last year to US$1.41. Before this earnings announcement, analysts had been forecasting revenues of US$18.7m and losses of US$1.37 per share in 2020. So there's been quite a change-up of views after the latest results, with analysts making a serious cut to their revenue forecasts while also granting a to the earnings per share numbers.

The average analyst price target fell 28% to US$9.75, implicitly signalling that lower earnings per share are a leading indicator for Calyxt's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Calyxt, with the most bullish analyst valuing it at US$16.00 and the most bearish at US$6.00 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 possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.

Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. We can infer from the latest estimates that analysts are expecting a continuation of Calyxt's historical trends, as next year's forecast 117% revenue growth is roughly in line with 106% annual revenue growth over the past three years. Compare this with the wider market, which analyst estimates (in aggregate) suggest will see revenues grow 17% next year. So although Calyxt is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider market.

The Bottom Line

The most important thing to take away is that analysts reduced their loss per share estimates for next year, perhaps highlighting increased optimism around Calyxt's prospects. Unfortunately analysts also downgraded their revenue estimates, although industry data suggests that Calyxt's revenues are expected to grow faster than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by the latest results, leading to a lower estimate of Calyxt's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Calyxt. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Calyxt going out to 2024, and you can see them free on our platform here..

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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