Earnings Update: Stoke Therapeutics, Inc. (NASDAQ:STOK) Just Reported And Analysts Are Trimming Their Forecasts

Stoke Therapeutics, Inc. (NASDAQ:STOK) just released its third-quarter report and things are looking bullish. Results clearly exceeded expectations, with a substantial revenue beat leading to smaller losses in what looks like a definite win for investors. Revenues were US$4.9m and the statutory loss per share was US$0.47, smaller than the analysts had forecast. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Stoke Therapeutics

After the latest results, the consensus from Stoke Therapeutics' eight analysts is for revenues of US$14.3m in 2025, which would reflect a chunky 14% decline in revenue compared to the last year of performance. Per-share losses are expected to explode, reaching US$2.50 per share. Before this earnings announcement, the analysts had been modelling revenues of US$15.8m and losses of US$2.53 per share in 2025.

There was no real change to the average price target of US$22.29, suggesting that the revisions to revenue estimates are not expected to have a long-term impact on Stoke Therapeutics' valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Stoke Therapeutics at US$35.00 per share, while the most bearish prices it at US$15.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for 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 Stoke Therapeutics' past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 12% by the end of 2025. This indicates a significant reduction from annual growth of 63% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 21% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Stoke 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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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.

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 Stoke Therapeutics going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Stoke Therapeutics (1 is significant) you should be aware of.

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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.