TScan Therapeutics, Inc. (NASDAQ:TCRX) Just Reported, And Analysts Assigned A US$10.75 Price Target

TScan Therapeutics, Inc. (NASDAQ:TCRX) just released its latest yearly report and things are not looking great. Revenues missed expectations somewhat, coming in at US$14m and leading to a corresponding blowout in statutory losses. The loss per share was US$2.75, some 15% larger than the analysts 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.

See our latest analysis for TScan Therapeutics

Following the latest results, TScan Therapeutics' four analysts are now forecasting revenues of US$17.7m in 2023. This would be a major 31% improvement in sales compared to the last 12 months. Per-share losses are supposed to see a sharp uptick, reaching US$3.08. Before this latest report, the consensus had been expecting revenues of US$12.9m and US$2.62 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts lifting this year's revenue estimates, while at the same time increasing their loss per share numbers to reflect the cost of achieving this growth.

It will come as no surprise that expanding losses caused the consensus price target to fall 31% to US$10.75with the analysts implicitly ranking ongoing losses as a greater concern than growing revenues. 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 TScan Therapeutics analyst has a price target of US$15.00 per share, while the most pessimistic values it at US$6.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that TScan Therapeutics' revenue growth is expected to slow, with the forecast 31% annualised growth rate until the end of 2023 being well below the historical 69% p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 14% per year. Even after the forecast slowdown in growth, it seems obvious that TScan Therapeutics is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for 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 TScan Therapeutics. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple TScan Therapeutics analysts - going out to 2025, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 4 warning signs for TScan Therapeutics (1 is a bit unpleasant!) that you need to be mindful 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.