Beam Therapeutics Inc. (NASDAQ:BEAM) Just Reported First-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

Beam Therapeutics Inc. (NASDAQ:BEAM) shareholders are probably feeling a little disappointed, since its shares fell 2.1% to US$22.24 in the week after its latest quarterly results. Revenue was dismal, with revenues of US$7.4m coming in some 49% below forecasts. The only bright spot was that statutory losses of US$1.21 per share were 16% smaller than the analysts had predicted. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Beam Therapeutics

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After the latest results, the consensus from Beam Therapeutics' eleven analysts is for revenues of US$62.8m in 2024, which would reflect a disturbing 83% decline in revenue compared to the last year of performance. Per-share losses are expected to explode, reaching US$4.67 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$63.4m and losses of US$5.44 per share in 2024. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a favorable reduction in losses per share in particular.

There's been no major changes to the consensus price target of US$48.38, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Beam Therapeutics analyst has a price target of US$78.00 per share, while the most pessimistic values it at US$23.00. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 90% by the end of 2024. This indicates a significant reduction from annual growth of 81% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 18% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Beam Therapeutics is expected to lag 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, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Beam Therapeutics' revenue is expected to perform worse 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.

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

Before you take the next step you should know about the 4 warning signs for Beam Therapeutics (1 is a bit concerning!) that we have uncovered.

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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.