Zai Lab Limited (NASDAQ:ZLAB) Analysts Are Cutting Their Estimates: Here's What You Need To Know

Zai Lab Limited (NASDAQ:ZLAB) missed earnings with its latest third-quarter results, disappointing overly-optimistic forecasters. Revenues missed expectations somewhat, coming in at US$116m, but statutory earnings fell catastrophically short, with a loss of US$0.33 some 38% larger than what the analysts had predicted. 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.

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Taking into account the latest results, the current consensus from Zai Lab's 16 analysts is for revenues of US$755.1m in 2026. This would reflect a huge 71% increase on its revenue over the past 12 months. Per-share statutory losses are expected to explode, reaching US$0.27 per share. Before this earnings report, the analysts had been forecasting revenues of US$844.2m and earnings per share (EPS) of US$0.27 in 2026. So we can see that the consensus has become notably more bearish on Zai Lab's outlook following these results, with a real cut to next year's revenue estimates. Furthermore, they expect the business to be loss-making next year, compared to their previous calls for a profit.

Check out our latest analysis for Zai Lab

The consensus price target fell 7.8% to US$50.84, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Zai Lab at US$67.22 per share, while the most bearish prices it at US$25.70. 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.

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 clear from the latest estimates that Zai Lab's rate of growth is expected to accelerate meaningfully, with the forecast 54% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 35% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 21% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Zai Lab is expected to grow much faster than its industry.

The Bottom Line

The biggest low-light for us was that the forecasts for Zai Lab dropped from profits to a loss next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster 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 Zai Lab's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Zai Lab going out to 2027, and you can see them free on our platform here.

We also provide an overview of the Zai Lab Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, 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.