Natera, Inc. (NASDAQ:NTRA) Released Earnings Last Week And Analysts Lifted Their Price Target To US$119

A week ago, Natera, Inc. (NASDAQ:NTRA) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. Revenues of US$368m were better than expected, some 11% ahead of forecasts. The company still lost a statutory US$0.56 per share, although the losses were 16% smaller than the analysts expected. 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.

View our latest analysis for Natera

Taking into account the latest results, the most recent consensus for Natera from 16 analysts is for revenues of US$1.44b in 2024. If met, it would imply a decent 19% increase on its revenue over the past 12 months. Losses are supposed to decline, shrinking 17% from last year to US$2.48. Before this latest report, the consensus had been expecting revenues of US$1.34b and US$2.31 per share in losses. So it's pretty clear consensus is mixed on Natera after the new consensus numbers; while the analysts lifted revenue numbers, they also administered a moderate increase in per-share loss expectations.

It will come as a surprise to learn that the consensus price target rose 15% to US$119, with the analysts clearly more interested in growing revenue, even as losses intensify. 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. Currently, the most bullish analyst values Natera at US$160 per share, while the most bearish prices it at US$37.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Natera's past performance and to peers in the same industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 26% growth on an annualised basis. That is in line with its 30% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 18% per year. So it's pretty clear that Natera is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Natera. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Natera going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Natera .

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