Shattuck Labs, Inc. (NASDAQ:STTK) just released its latest annual results and things are looking bullish. The results were impressive, with revenues of US$30m exceeding analyst forecasts by 1,226%, and statutory losses of US$1.07 were likewise much smaller than the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus, from the three analysts covering Shattuck Labs, is for revenues of US$1.38m in 2022, which would reflect a stressful 95% reduction in Shattuck Labs' sales over the past 12 months. Losses are forecast to balloon 112% to US$2.25 per share. Before this earnings announcement, the analysts had been modelling revenues of US$2.53m and losses of US$1.92 per share in 2022. 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 consensus price target fell 16% to US$39.00, with the analysts clearly concerned about the company following the weaker revenue and earnings 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. The most optimistic Shattuck Labs analyst has a price target of US$47.00 per share, while the most pessimistic values it at US$31.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Shattuck Labs shareholders.
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. Over the past three years, revenues have declined around 15% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 95% decline in revenue until the end of 2022. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 11% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Shattuck Labs to suffer worse than the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Shattuck Labs. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Shattuck Labs' future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on Shattuck Labs. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Shattuck Labs going out to 2024, and you can see them free on our platform here..
You still need to take note of risks, for example - Shattuck Labs has 3 warning signs (and 1 which is a bit unpleasant) we think you should know about.
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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.