The OmniAb, Inc. (NASDAQ:OABI) First-Quarter Results Are Out And Analysts Have Published New Forecasts

OmniAb, Inc. (NASDAQ:OABI) just released its latest quarterly report and things are not looking great. It was not a great result overall, as revenues of US$3.8m fell 34% short of analyst expectations. Unsurprisingly, statutory losses ended up being13% larger than the analysts expected, at US$0.19 per share. 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 OmniAb

Following the latest results, OmniAb's seven analysts are now forecasting revenues of US$33.0m in 2024. This would be a huge 57% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 20% to US$0.43. Before this latest report, the consensus had been expecting revenues of US$31.7m and US$0.59 per share in losses. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a very promising decrease in loss per share in particular.

Despite these upgrades,the analysts have not made any major changes to their price target of US$9.88, implying that their latest estimates don't have a long term impact on what they think the stock is worth. 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. The most optimistic OmniAb analyst has a price target of US$12.00 per share, while the most pessimistic values it at US$7.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that OmniAb is forecast to grow faster in the future than it has in the past, with revenues expected to display 82% annualised growth until the end of 2024. If achieved, this would be a much better result than the 68% annual decline over the past year. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.5% annually. Not only are OmniAb's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Happily, they also upgraded their revenue estimates, and are forecasting them 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for OmniAb going out to 2026, 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 1 warning sign with OmniAb , and understanding this should be part of your investment process.

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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.