Veracyte, Inc. (NASDAQ:VCYT) Just Released Its First-Quarter Results And Analysts Are Updating Their Estimates

Veracyte, Inc. (NASDAQ:VCYT) investors will be delighted, with the company turning in some strong numbers with its latest results. Revenues and losses per share were both better than expected, with revenues of US$97m leading estimates by 3.0%. Statutory losses were smaller than the analystsexpected, coming in at US$0.02 per share. 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. 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 Veracyte

Following the latest results, Veracyte's nine analysts are now forecasting revenues of US$402.9m in 2024. This would be an okay 7.3% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 77% to US$0.20. Before this earnings announcement, the analysts had been modelling revenues of US$398.0m and losses of US$0.24 per share in 2024. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a favorable reduction in losses per share in particular.

There's been no major changes to the consensus price target of US$30.60, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock's valuation. 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. Currently, the most bullish analyst values Veracyte at US$37.00 per share, while the most bearish prices it at US$21.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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. We would highlight that Veracyte's revenue growth is expected to slow, with the forecast 9.9% annualised growth rate until the end of 2024 being well below the historical 29% p.a. growth over the last 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 important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$30.60, 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 forecasts for Veracyte going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Veracyte 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.