Stock Analysis

Alpha Teknova, Inc. (NASDAQ:TKNO) Just Reported, And Analysts Assigned A US$23.00 Price Target

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As you might know, Alpha Teknova, Inc. (NASDAQ:TKNO) just kicked off its latest quarterly results with some very strong numbers. Results overall were credible, with revenues arriving 6.2% better than analyst forecasts at US$11m. Higher revenues also resulted in lower statutory losses, which were US$0.20 per share, some 6.2% 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Alpha Teknova

NasdaqGM:TKNO Earnings and Revenue Growth May 14th 2022

Taking into account the latest results, the most recent consensus for Alpha Teknova from three analysts is for revenues of US$47.2m in 2022 which, if met, would be a sizeable 21% increase on its sales over the past 12 months. Per-share losses are expected to explode, reaching US$1.05 per share. Before this earnings announcement, the analysts had been modelling revenues of US$46.3m and losses of US$1.09 per share in 2022. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrade to loss per share forecasts for this year.

Even with the lower forecast losses, the analysts lowered their valuations, with the average price target falling 18% to US$23.00. It looks likethe analysts have become less optimistic about the overall business. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Alpha Teknova, with the most bullish analyst valuing it at US$26.00 and the most bearish at US$20.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Alpha Teknova is an easy business to forecast or the the analysts are all using similar assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Alpha Teknova's past performance and to peers in the same industry. It's clear from the latest estimates that Alpha Teknova's rate of growth is expected to accelerate meaningfully, with the forecast 29% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 14% over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 8.0% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Alpha Teknova 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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 Alpha Teknova's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Alpha Teknova. Long-term earnings power is much more important than next year's profits. We have forecasts for Alpha Teknova going out to 2024, and you can see them free on our platform here.

Even so, be aware that Alpha Teknova is showing 2 warning signs in our investment analysis , you should know about...

What are the risks and opportunities for Alpha Teknova?

Alpha Teknova, Inc. produces critical reagents for the research, discovery, development, and commercialization of novel therapies, vaccines, and molecular diagnostics.

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  • Revenue is forecast to grow 21.14% per year


  • Has less than 1 year of cash runway

  • Volatile share price over the past 3 months

  • Currently unprofitable and not forecast to become profitable over the next 3 years

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