Zymeworks Inc. (NASDAQ:ZYME) Just Released Its Third-Quarter Earnings: Here's What Analysts Think

It's been a mediocre week for Zymeworks Inc. (NASDAQ:ZYME) shareholders, with the stock dropping 14% to US$16.46 in the week since its latest quarterly results. Revenues of US$28m came in 7.7% below estimates, but statutory losses were well contained with a per-share loss of US$0.26 being some 19% smaller than what the analysts were predicting. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Zymeworks after the latest results.

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After the latest results, the ten analysts covering Zymeworks are now predicting revenues of US$152.8m in 2026. If met, this would reflect a meaningful 14% improvement in revenue compared to the last 12 months. The loss per share is expected to ameliorate slightly, reducing to US$0.81. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$152.5m and losses of US$0.95 per share in 2026. Although the revenue estimates have not really changed Zymeworks'future looks a little different to the past, with a favorable reduction in the loss per share forecasts in particular.

View our latest analysis for Zymeworks

There's been no major changes to the consensus price target of US$24.82, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock's valuation. 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. Currently, the most bullish analyst values Zymeworks at US$32.00 per share, while the most bearish prices it at US$12.00. 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.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Zymeworks' revenue growth is expected to slow, with the forecast 11% annualised growth rate until the end of 2026 being well below the historical 17% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 21% per year. Factoring in the forecast slowdown in growth, it seems obvious that Zymeworks is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$24.82, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Zymeworks analysts - going out to 2027, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Zymeworks (1 is a bit unpleasant) you should be aware of.

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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.