4D Molecular Therapeutics, Inc. (NASDAQ:FDMT) Just Reported And Analysts Have Been Cutting Their Estimates

4D Molecular Therapeutics, Inc. (NASDAQ:FDMT) just released its quarterly report and things are looking bullish. Revenue crushed expectations at US$20m, beating expectations by 118%. 4D Molecular Therapeutics reported a statutory loss of US$0.24 per share, which - although not amazing - was much smaller than the analysts predicted. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for 4D Molecular Therapeutics

Taking into account the latest results, the current consensus, from the seven analysts covering 4D Molecular Therapeutics, is for revenues of US$3.82m in 2024. This implies a disturbing 83% reduction in 4D Molecular Therapeutics' revenue over the past 12 months. Per-share losses are expected to explode, reaching US$3.06 per share. Before this earnings announcement, the analysts had been modelling revenues of US$4.97m and losses of US$3.02 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue forecasts while also making no real change to the loss per share numbers.

There was no real change to the average price target of US$33.56, suggesting that the revisions to revenue estimates are not expected to have a long-term impact on 4D Molecular Therapeutics' 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. The most optimistic 4D Molecular Therapeutics analyst has a price target of US$50.00 per share, while the most pessimistic values it at US$25.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying 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. One more thing stood out to us about these estimates, and it's the idea that 4D Molecular Therapeutics' decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 75% to the end of 2024. This tops off a historical decline of 8.5% a year over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 15% annually. So while a broad number of companies are forecast to grow, unfortunately 4D Molecular Therapeutics is expected to see its revenue affected worse than other companies in the industry.

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. 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.

With that in mind, we wouldn't be too quick to come to a conclusion on 4D Molecular Therapeutics. Long-term earnings power is much more important than next year's profits. We have forecasts for 4D Molecular Therapeutics going out to 2025, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 3 warning signs for 4D Molecular Therapeutics (1 can't be ignored!) that you need to be mindful of.

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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.