Silence Therapeutics plc (NASDAQ:SLN) Consensus Forecasts Have Become A Little Darker Since Its Latest Report

As you might know, Silence Therapeutics plc (NASDAQ:SLN) last week released its latest second-quarter, and things did not turn out so great for shareholders. It was not a great statutory result, with revenues coming in 94% lower than the analysts predicted. Unsurprisingly, earnings also fell seriously short of forecasts, turning into a per-share loss of UK£0.34. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Silence Therapeutics

After the latest results, the five analysts covering Silence Therapeutics are now predicting revenues of UK£22.5m in 2024. If met, this would reflect a substantial 26% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 59% to UK£0.35. Before this latest report, the consensus had been expecting revenues of UK£27.2m and UK£0.30 per share in losses. There's been a definite change in sentiment in this update, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

The average price target lifted 6.1% to US$59.20, clearly signalling that the weaker revenue and EPS outlook are not expected to weigh on the stock over the longer term. 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 Silence Therapeutics analyst has a price target of US$75.00 per share, while the most pessimistic values it at US$49.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Silence Therapeutics' rate of growth is expected to accelerate meaningfully, with the forecast 58% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 47% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 23% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Silence Therapeutics is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. They also downgraded Silence Therapeutics' revenue estimates, but industry data suggests that it is expected to 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Silence Therapeutics. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Silence Therapeutics analysts - going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 3 warning signs for Silence Therapeutics you should be aware of, and 1 of them is a bit concerning.

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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.