Veracyte, Inc. Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

Shareholders will be ecstatic, with their stake up 39% over the past week following Veracyte, Inc.'s (NASDAQ:VCYT) latest second-quarter results. It was a solid earnings report, with revenues and earnings both coming in very strong. Revenues were 14% higher than the analysts had forecast, at US$114m, while the company also delivered a surprise statutory profit, against analyst expectations of a loss. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Veracyte after the latest results.

Check out our latest analysis for Veracyte

Following the latest results, Veracyte's eight analysts are now forecasting revenues of US$421.4m in 2024. This would be a credible 5.5% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 98% to US$0.012. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$405.9m and losses of US$0.047 per share in 2024. So it seems there's been a definite increase in optimism about Veracyte's future following the latest consensus numbers, with a very favorable reduction to the loss per share forecasts in particular.

Despite these upgrades,the analysts have not made any major changes to their price target of US$31.20, implying that their latest estimates don't have a long term impact on what they think the stock is worth. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Veracyte analyst has a price target of US$37.00 per share, while the most pessimistic values it at US$21.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Veracyte's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 11% growth on an annualised basis. This is compared to a historical growth rate of 29% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 18% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Veracyte.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. The consensus price target held steady at US$31.20, with the latest estimates not enough to have an impact on their price targets.

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

It is also worth noting that we have found 1 warning sign for Veracyte that you need to take into consideration.

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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.