OmniAb, Inc. (NASDAQ:OABI) Just Reported And Analysts Have Been Cutting Their Estimates

The analysts might have been a bit too bullish on OmniAb, Inc. (NASDAQ:OABI), given that the company fell short of expectations when it released its third-quarter results last week. It was not a great result overall, as revenues of US$4.2m fell 50% short of analyst expectations. Unsurprisingly, statutory losses ended up being16% larger than the analysts expected, at US$0.16 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for OmniAb

Following the latest results, OmniAb's seven analysts are now forecasting revenues of US$46.9m in 2025. This would be a major 130% improvement in revenue compared to the last 12 months. The loss per share is expected to ameliorate slightly, reducing to US$0.48. Before this earnings announcement, the analysts had been modelling revenues of US$53.5m and losses of US$0.41 per share in 2025. There's been a definite change in sentiment in this update, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

There was no major change to the consensus price target of US$9.75, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. 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. There are some variant perceptions on OmniAb, with the most bullish analyst valuing it at US$12.00 and the most bearish at US$8.00 per share. 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 OmniAb shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the OmniAb's past performance and to peers in the same industry. The analysts are definitely expecting OmniAb's growth to accelerate, with the forecast 95% annualised growth to the end of 2025 ranking favourably alongside historical growth of 6.2% per annum 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 6.5% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that OmniAb is expected to grow much 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 OmniAb. They also downgraded OmniAb's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. 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 OmniAb analysts - going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with OmniAb .

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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.