Earnings Beat: RAPT Therapeutics, Inc. (NASDAQ:RAPT) Just Beat Analyst Forecasts, And Analysts Have Been Lifting Their Forecasts

One of the biggest stories of last week was how RAPT Therapeutics, Inc. (NASDAQ:RAPT) shares plunged 47% in the week since its latest quarterly results, closing yesterday at US$15.89. Revenues were 53% better than analyst models forecast, at US$1.5m. Perhaps unsurprisingly, statutory losses were also slightly larger than expected, at US$0.60 per share, reflecting the higher costs which were likely incurred in generating that revenue. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for RAPT Therapeutics

Taking into account the latest results, the current consensus, from the five analysts covering RAPT Therapeutics, is for revenues of US$1.18m in 2021, which would reflect a sizeable 69% reduction in RAPT Therapeutics' sales over the past 12 months. Losses are forecast to balloon 25% to US$3.07 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$1.04m and losses of US$3.08 per share in 2021. So there's been quite a change-up of views after the recent consensus updates, withthe analysts noticeably increasing their revenue forecasts while also expecting losses per share to hold steady.

The consensus price target fell 18% to US$36.17as the analysts signal that ongoing losses are likely to weigh on the stock price. 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 RAPT Therapeutics, with the most bullish analyst valuing it at US$51.00 and the most bearish at US$30.00 per share. 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.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on RAPT Therapeutics. Long-term earnings power is much more important than next year's profits. We have forecasts for RAPT Therapeutics going out to 2024, and you can see them free on our platform here.

Even so, be aware that RAPT Therapeutics is showing 5 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...

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This article by Simply Wall St is general in nature. 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.
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