Earnings Release: Here's Why Analysts Cut Their IsoPlexis Corporation (NASDAQ:ISO) Price Target To US$12.00

One of the biggest stories of last week was how IsoPlexis Corporation (NASDAQ:ISO) shares plunged 25% in the week since its latest full-year results, closing yesterday at US$3.95. It was a pretty bad result overall; while revenues were in line with expectations at US$17m, statutory losses exploded to US$8.99 per share. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for IsoPlexis

Taking into account the latest results, the most recent consensus for IsoPlexis from three analysts is for revenues of US$26.5m in 2022 which, if met, would be a sizeable 53% increase on its sales over the past 12 months. Losses are expected to hold steady at around US$2.40. Before this latest report, the consensus had been expecting revenues of US$26.2m and US$2.41 per share in losses.

As a result, it's unexpected to see that the consensus price target fell 14% to US$12.00, with the analysts seemingly becoming more concerned about ongoing losses, despite making no major changes to their forecasts.

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. We can infer from the latest estimates that forecasts expect a continuation of IsoPlexis'historical trends, as the 53% annualised revenue growth to the end of 2022 is roughly in line with the 66% annual revenue growth over the past year. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 7.8% annually. So although IsoPlexis is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of IsoPlexis' future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on IsoPlexis. Long-term earnings power is much more important than next year's profits. We have forecasts for IsoPlexis going out to 2024, and you can see them free on our platform here.

You still need to take note of risks, for example - IsoPlexis has 2 warning signs we think you should be aware 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.