Personalis, Inc. (NASDAQ:PSNL) Just Reported Earnings, And Analysts Cut Their Target Price

It's been a sad week for Personalis, Inc. (NASDAQ:PSNL), who've watched their investment drop 12% to US$4.14 in the week since the company reported its annual result. The results look positive overall; while revenues of US$85m were in line with analyst predictions, statutory losses were 5.4% smaller than expected, with Personalis losing US$1.37 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Personalis

After the latest results, the consensus from Personalis' six analysts is for revenues of US$82.9m in 2025, which would reflect a perceptible 2.1% decline in revenue compared to the last year of performance. Losses are expected to increase substantially, hitting US$1.06 per share. Before this latest report, the consensus had been expecting revenues of US$84.6m and US$1.08 per share in losses.

The analysts have cut their price target 7.3% to US$7.40per share, signalling that the declining revenue and ongoing losses are contributing to the lower valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Personalis analyst has a price target of US$9.00 per share, while the most pessimistic values it at US$5.00. 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 Personalis shareholders.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 2.1% by the end of 2025. This indicates a significant reduction from annual growth of 0.9% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.9% per year. It's pretty clear that Personalis' revenues are expected to perform substantially worse than 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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Personalis' future valuation.

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 Personalis analysts - going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Personalis has 4 warning signs (and 2 which don't sit too well with us) we think you should know about.

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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.