SomaLogic, Inc. (NASDAQ:SLGC) Just Reported, And Analysts Assigned A US$3.93 Price Target

SomaLogic, Inc. (NASDAQ:SLGC) investors will be delighted, with the company turning in some strong numbers with its latest results. Results overall were solid, with revenues arriving 8.4% better than analyst forecasts at US$22m. Higher revenues also resulted in substantially lower statutory losses which, at US$0.12 per share, were 8.4% smaller than the analysts expected. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on SomaLogic after the latest results.

Check out our latest analysis for SomaLogic

Taking into account the latest results, the current consensus from SomaLogic's four analysts is for revenues of US$98.6m in 2024. This would reflect a major 21% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 23% to US$0.53. Before this earnings announcement, the analysts had been modelling revenues of US$95.7m and losses of US$0.60 per share in 2024. So it seems there's been a definite increase in optimism about SomaLogic's future following the latest consensus numbers, with a cut to the loss per share forecasts in particular.

The consensus price target fell 21%, to US$3.93, suggesting that the analysts remain pessimistic on the company, despite the improved earnings and revenue outlook. 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. Currently, the most bullish analyst values SomaLogic at US$7.00 per share, while the most bearish prices it at US$2.30. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting SomaLogic's growth to accelerate, with the forecast 16% annualised growth to the end of 2024 ranking favourably alongside historical growth of 13% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.9% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that SomaLogic is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster 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 SomaLogic. Long-term earnings power is much more important than next year's profits. We have forecasts for SomaLogic going out to 2025, and you can see them free on our platform here.

Before you take the next step you should know about the 4 warning signs for SomaLogic that we have uncovered.

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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.