Werewolf Therapeutics, Inc. (NASDAQ:HOWL) Second-Quarter Results: Here's What Analysts Are Forecasting For This Year

Werewolf Therapeutics, Inc. (NASDAQ:HOWL) just released its latest second-quarter results and things are looking bullish. Revenue crushed expectations at US$8.1m, beating expectations by 157%. Werewolf Therapeutics reported a statutory loss of US$0.14 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Werewolf Therapeutics

Taking into account the latest results, the current consensus, from the four analysts covering Werewolf Therapeutics, is for revenues of US$16.6m in 2023. This implies a substantial 33% reduction in Werewolf Therapeutics' revenue over the past 12 months. Per-share losses are supposed to see a sharp uptick, reaching US$1.31. Before this earnings announcement, the analysts had been modelling revenues of US$21.7m and losses of US$1.38 per share in 2023. 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 reducing the estimated losses the business will incur.

The consensus price target was broadly unchanged at US$11.33, implying that the business is performing roughly in line with expectations, despite adjustments to both revenue and earnings estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Werewolf Therapeutics at US$15.00 per share, while the most bearish prices it at US$8.30. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Werewolf Therapeutics shareholders.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 55% by the end of 2023. This indicates a significant reduction from annual growth of 498% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 15% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Werewolf Therapeutics is expected to lag 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. 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. With that said, earnings are more important to the long-term value of the business. 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.

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. We have estimates - from multiple Werewolf Therapeutics analysts - going out to 2025, 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 Werewolf Therapeutics you should be aware of, and 1 of them is a bit unpleasant.

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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.