US$22.20 - That's What Analysts Think Wave Life Sciences Ltd. (NASDAQ:WVE) Is Worth After These Results

Wave Life Sciences Ltd. (NASDAQ:WVE) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. It was not a great statutory result, with revenues coming in 159% lower than the analysts predicted. Unsurprisingly, earnings also fell seriously short of forecasts, turning into a per-share loss of US$0.47. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Wave Life Sciences

Taking into account the latest results, the consensus forecast from Wave Life Sciences' ten analysts is for revenues of US$63.4m in 2025. This reflects a solid 18% improvement in revenue compared to the last 12 months. Per-share losses are supposed to see a sharp uptick, reaching US$1.06. Before this earnings announcement, the analysts had been modelling revenues of US$64.5m and losses of US$0.98 per share in 2025. Overall it looks as though the analysts were a bit mixed on the latest consensus updates. Although revenue forecasts held steady, the consensus also made a modest increase to its losses per share forecasts.

Although the analysts are now forecasting higher losses, the average price target rose 12% to 19.8, which could indicate that these losses are expected to be "one-off", or are not anticipated to have a longer-term impact on the business. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Wave Life Sciences, with the most bullish analyst valuing it at US$36.00 and the most bearish at US$15.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Wave Life Sciences' revenue growth is expected to slow, with the forecast 14% annualised growth rate until the end of 2025 being well below the historical 40% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 10% per year. So it's pretty clear that, while Wave Life Sciences' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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

Plus, you should also learn about the 3 warning signs we've spotted with Wave Life Sciences (including 2 which are a bit unpleasant) .

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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.