Results: Monte Rosa Therapeutics, Inc. Confounded Analyst Expectations With A Surprise Profit

It's been a mediocre week for Monte Rosa Therapeutics, Inc. (NASDAQ:GLUE) shareholders, with the stock dropping 18% to US$4.09 in the week since its latest quarterly results. Revenues of 526% beat expectations by US$85m and was sufficient to generate a statutory profit of US$0.57 - a pleasant surprise given that the analysts were forecasting a loss! 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Monte Rosa Therapeutics after the latest results.

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Following the recent earnings report, the consensus from six analysts covering Monte Rosa Therapeutics is for revenues of US$59.1m in 2025. This implies a sizeable 63% decline in revenue compared to the last 12 months. The company is forecast to report a statutory loss of US$1.48 in 2025, a sharp decline from a profit over the last year. Before this latest report, the consensus had been expecting revenues of US$53.5m and US$1.60 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

Check out our latest analysis for Monte Rosa Therapeutics

Despite these upgrades,the analysts have not made any major changes to their price target of US$16.13, implying that their latest estimates don't have a long term impact on what they think the stock is worth. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Monte Rosa Therapeutics analyst has a price target of US$20.00 per share, while the most pessimistic values it at US$10.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 73% annualised decline to the end of 2025. That is a notable change from historical growth of 157% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 18% per year. It's pretty clear that Monte Rosa Therapeutics' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, they also upgraded their revenue estimates, although our data indicates it is 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Monte Rosa Therapeutics. Long-term earnings power is much more important than next year's profits. We have forecasts for Monte Rosa Therapeutics going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 3 warning signs for Monte Rosa Therapeutics (1 is a bit concerning!) that you need to take into consideration.

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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.