Analyst Forecasts Just Became More Bearish On Zai Lab Limited (NASDAQ:ZLAB)

Market forces rained on the parade of Zai Lab Limited (NASDAQ:ZLAB) shareholders today, when the analysts downgraded their forecasts for this year. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

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After the downgrade, the 17 analysts covering Zai Lab are now predicting revenues of US$485m in 2025. If met, this would reflect a notable 9.8% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$556m of revenue in 2025. The consensus view seems to have become more pessimistic on Zai Lab, noting the measurable cut to revenue estimates in this update.

See our latest analysis for Zai Lab

There was no particular change to the consensus price target of US$53.40, with Zai Lab's latest outlook seemingly not enough to result in a change of valuation.

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 Zai Lab's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 20% growth on an annualised basis. This is compared to a historical growth rate of 35% over the past five years. Compare this to the 541 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 21% per year. Factoring in the forecast slowdown in growth, it looks like Zai Lab is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They're also forecasting for revenues to grow at about the same rate as companies in the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Zai Lab after today.

But wait - there's more! We have estimates for Zai Lab from its 17 analysts out until 2027, and you can see them free on our platform here.

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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.