US$26.50: That's What Analysts Think F-star Therapeutics, Inc. (NASDAQ:FSTX) Is Worth After Its Latest Results

By
Simply Wall St
Published
March 17, 2022
NasdaqCM:FSTX
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F-star Therapeutics, Inc. (NASDAQ:FSTX) defied analyst predictions to release its yearly results, which were ahead of market expectations. Revenues of US$21m beat estimates by a substantial 38% margin. Unfortunately, F-star Therapeutics also reported a statutory loss of US$1.88 per share, which at least was smaller than the analysts expected. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for F-star Therapeutics

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NasdaqCM:FSTX Earnings and Revenue Growth March 17th 2022

Taking into account the latest results, the current consensus, from the six analysts covering F-star Therapeutics, is for revenues of US$6.13m in 2022, which would reflect a substantial 71% reduction in F-star Therapeutics' sales over the past 12 months. Per-share losses are expected to explode, reaching US$2.68 per share. Before this latest report, the consensus had been expecting revenues of US$4.91m and US$2.03 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts lifting this year's revenue estimates, while at the same time increasing their loss per share numbers to reflect the cost of achieving this growth.

It will come as no surprise that expanding losses caused the consensus price target to fall 9.1% to US$26.50with the analysts implicitly ranking ongoing losses as a greater concern than growing revenues. 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 F-star Therapeutics analyst has a price target of US$35.00 per share, while the most pessimistic values it at US$15.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the 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 F-star Therapeutics' decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 71% to the end of 2022. This tops off a historical decline of 48% a year over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 11% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect F-star Therapeutics to suffer worse than the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at F-star Therapeutics. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider industry. 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.

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 F-star Therapeutics going out to 2024, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 5 warning signs for F-star Therapeutics you should be aware of, and 2 of them don't sit too well with us.

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