Legend Biotech Corporation (NASDAQ:LEGN) Just Released Its Third-Quarter Earnings: Here's What Analysts Think

Legend Biotech Corporation (NASDAQ:LEGN) shareholders are probably feeling a little disappointed, since its shares fell 2.6% to US$39.89 in the week after its latest quarterly results. Revenue of US$160m came in 9.7% ahead of expectations, although statutory earnings didn't fare nearly so well, recording a loss of US$0.68, a 17% miss. 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. 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 Legend Biotech

Taking into account the latest results, the consensus forecast from Legend Biotech's 20 analysts is for revenues of US$1.04b in 2025. This reflects a huge 100% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 55% to US$0.85. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$1.02b and losses of US$1.19 per share in 2025. Although the revenue estimates have not really changed Legend Biotech'sfuture looks a little different to the past, with a very promising decrease in the loss per share forecasts in particular.

The average price target held steady at US$82.50, seeming to indicate that business is performing in line with expectations. 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 Legend Biotech analyst has a price target of US$95.00 per share, while the most pessimistic values it at US$60.00. 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 Legend Biotech shareholders.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Legend Biotech's rate of growth is expected to accelerate meaningfully, with the forecast 74% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 48% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 22% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Legend Biotech is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$82.50, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Legend Biotech analysts - going out to 2026, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.