Personalis, Inc. (NASDAQ:PSNL) Released Earnings Last Week And Analysts Lifted Their Price Target To US$8.50

Personalis, Inc. (NASDAQ:PSNL) just released its quarterly report and things are looking bullish. Revenues beat expectations coming in atUS$14m, ahead of estimates by 8.9%. Statutory losses were somewhat smaller thanthe analysts expected, coming in at US$0.24 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

Taking into account the latest results, the current consensus from Personalis' eight analysts is for revenues of US$90.9m in 2026. This would reflect a substantial 32% increase on its revenue over the past 12 months. Losses are expected to increase substantially, hitting US$0.93 per share. Before this latest report, the consensus had been expecting revenues of US$95.0m and US$0.92 per share in losses.

Check out our latest analysis for Personalis

The consensus price target rose 5.4% to US$8.50, seeming to imply that weaker revenue sentiment is not expected to have a major impact on the company's valuation. 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 Personalis analyst has a price target of US$11.00 per share, while the most pessimistic values it at US$5.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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 Personalis is forecast to grow faster in the future than it has in the past, with revenues expected to display 25% annualised growth until the end of 2026. If achieved, this would be a much better result than the 0.3% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.2% annually. So it looks like Personalis is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will 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.

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

We don't want to rain on the parade too much, but we did also find 3 warning signs for Personalis that you need to be mindful of.

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.