Earnings Release: Here's Why Analysts Cut Their Verve Therapeutics, Inc. (NASDAQ:VERV) Price Target To US$25.78

As you might know, Verve Therapeutics, Inc. (NASDAQ:VERV) just kicked off its latest second-quarter results with some very strong numbers. Results clearly exceeded expectations, with a substantial revenue beat leading to smaller losses in what looks like a definite win for investors. Revenues were US$6.7m and the statutory loss per share was US$0.59, smaller than the analysts had 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.

View our latest analysis for Verve Therapeutics

Following the recent earnings report, the consensus from nine analysts covering Verve Therapeutics is for revenues of US$12.9m in 2024. This implies a concerning 37% decline in revenue compared to the last 12 months. Losses are expected to increase substantially, hitting US$2.69 per share. Before this latest report, the consensus had been expecting revenues of US$12.5m and US$2.72 per share in losses.

The analysts trimmed their valuations, with the average price target falling 17% to US$25.78, with the ongoing losses clearly weighing on sentiment despite the upgraded revenue estimates. 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 Verve Therapeutics, with the most bullish analyst valuing it at US$40.00 and the most bearish at US$15.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. We would highlight that revenue is expected to reverse, with a forecast 61% annualised decline to the end of 2024. That is a notable change from historical growth of 121% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 23% per year. It's pretty clear that Verve Therapeutics' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for 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 fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Verve Therapeutics' future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Verve Therapeutics. 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 Verve Therapeutics going out to 2026, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Verve Therapeutics (at least 1 which is a bit concerning) , and understanding them should be part of your investment process.

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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.