The Zai Lab Limited (NASDAQ:ZLAB) Third-Quarter Results Are Out And Analysts Have Published New Forecasts

There's been a notable change in appetite for Zai Lab Limited (NASDAQ:ZLAB) shares in the week since its third-quarter report, with the stock down 13% to US$26.67. It looks like the results were pretty good overall. While revenues of US$102m were in line with analyst predictions, statutory losses were much smaller than expected, with Zai Lab losing US$0.42 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Zai Lab

Following the latest results, Zai Lab's 15 analysts are now forecasting revenues of US$584.5m in 2025. This would be a major 64% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 36% to US$1.77. Before this latest report, the consensus had been expecting revenues of US$582.4m and US$1.88 per share in losses. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers were unchanged.

There's been no major changes to the consensus price target of US$51.81, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock's valuation. 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 Zai Lab, with the most bullish analyst valuing it at US$72.00 and the most bearish at US$25.00 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Zai Lab'shistorical trends, as the 49% annualised revenue growth to the end of 2025 is roughly in line with the 45% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 22% per year. So although Zai Lab is expected to maintain its revenue growth rate, it's definitely expected to grow faster 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 reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Zai Lab going out to 2026, and you can see them free on our platform here.

You can also see our analysis of Zai Lab's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.