Analysts Are Upgrading Repare Therapeutics Inc. (NASDAQ:RPTX) After Its Latest Results

It's shaping up to be a tough period for Repare Therapeutics Inc. (NASDAQ:RPTX), which a week ago released some disappointing first-quarter results that could have a notable impact on how the market views the stock. Repare Therapeutics missed analyst estimates, with revenues of US$5.7m and a statutory loss per share (eps) of US$0.83 falling 7.2% and 6.2% below expectations, respectively. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Repare Therapeutics

After the latest results, the consensus from Repare Therapeutics' six analysts is for revenues of US$57.2m in 2023, which would reflect a stressful 58% decline in sales compared to the last year of performance. Losses are forecast to balloon 297% to US$2.76 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$43.7m and losses of US$2.79 per share in 2023. So there's definitely been a change in sentiment in this update, with the analysts upgrading this year's revenue estimates, while at the same time holding losses per share steady.

There were no major changes to the US$26.67consensus price target despite the higher revenue estimates, with the analysts seeming to believe that ongoing losses have a larger impact on the valuation than growing sales. 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. Currently, the most bullish analyst values Repare Therapeutics at US$49.00 per share, while the most bearish prices it at US$11.00. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Repare Therapeutics' past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 69% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 138% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 19% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Repare Therapeutics is expected to lag 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. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse 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. At Simply Wall St, we have a full range of analyst estimates for Repare Therapeutics going out to 2025, and you can see them free on our platform here..

Even so, be aware that Repare Therapeutics is showing 2 warning signs in our investment analysis , and 1 of those is concerning...

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.