Yahoo Finance Earnings Release: Here's Why Analysts Cut Their Compugen Ltd. (NASDAQ:CGEN) Price Target To US$5.00
Compugen Ltd. (NASDAQ:CGEN) just released its first-quarter report and things are looking bullish. Revenue crushed expectations at US$2.6m, beating expectations by 111%. Compugen reported a statutory loss of US$0.08 per share, which - although not amazing - was much smaller than the analysts predicted. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for Compugen
Taking into account the latest results, the current consensus from Compugen's dual analysts is for revenues of US$37.0m in 2024. This would reflect a satisfactory 2.8% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 73% to US$0.05. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$37.9m and losses of US$0.13 per share in 2024. While the revenue estimates fell, sentiment seems to have improved, with the analysts making a very promising decrease in losses per share in particular.
The consensus price target fell 6.2% to US$5.00, with the dip in revenue estimates clearly souring sentiment, despite the forecast reduction in losses.
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 Compugen's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.8% growth on an annualised basis. This is compared to a historical growth rate of 54% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 18% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Compugen.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
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 analyst estimates for Compugen going out as far as 2026, and you can see them free on our platform here.
Plus, you should also learn about the 4 warning signs we've spotted with Compugen (including 1 which is a bit concerning) .
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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.
