Earnings Release: Here's Why Analysts Cut Their Intellia Therapeutics, Inc. (NASDAQ:NTLA) Price Target To US$46.08

Intellia Therapeutics, Inc. (NASDAQ:NTLA) defied analyst predictions to release its yearly results, which were ahead of market expectations. The overall earnings picture was okay, with revenues of US$58m beating expectations by 11%. Statutory losses were US$5.25 per share, only marginally better than what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Intellia Therapeutics

Taking into account the latest results, the current consensus, from the 27 analysts covering Intellia Therapeutics, is for revenues of US$49.5m in 2025. This implies a definite 14% reduction in Intellia Therapeutics' revenue over the past 12 months. The loss per share is expected to ameliorate slightly, reducing to US$4.73. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$50.5m and losses of US$5.14 per share in 2025. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrade to loss per share forecasts for this year.

The consensus price target fell 9.3% to US$46.08, with the dip in revenue estimates clearly souring sentiment, despite the forecast reduction in losses. 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. Currently, the most bullish analyst values Intellia Therapeutics at US$106 per share, while the most bearish prices it at US$9.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 14% by the end of 2025. This indicates a significant reduction from annual growth of 0.7% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 20% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Intellia Therapeutics is expected to lag 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. 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. Even so, earnings are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Intellia Therapeutics' future valuation.

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 forecasts for Intellia Therapeutics going out to 2027, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Intellia Therapeutics , and understanding these should be part of your investment process.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.