Yahoo Finance Oxford Nanopore Technologies plc (LON:ONT) Consensus Forecasts Have Become A Little Darker Since Its Latest Report
It's been a pretty great week for Oxford Nanopore Technologies plc (LON:ONT) shareholders, with its shares surging 11% to UK£1.44 in the week since its latest full-year results. Oxford Nanopore Technologies reported revenues of UK£170m, in line with expectations, but it unfortunately also reported (statutory) losses of UK£0.19 per share, which were slightly larger than expected. 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.
View our latest analysis for Oxford Nanopore Technologies
Taking into account the latest results, the most recent consensus for Oxford Nanopore Technologies from nine analysts is for revenues of UK£192.1m in 2024. If met, it would imply a solid 13% increase on its revenue over the past 12 months. Losses are forecast to balloon 41% to UK£0.25 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of UK£207.2m and losses of UK£0.15 per share in 2024. So it's pretty clear the analysts have mixed opinions on Oxford Nanopore Technologies after this update; revenues were downgraded and per-share losses expected to increase.
The average price target fell 14% to UK£2.27, implicitly signalling that lower earnings per share are a leading indicator for Oxford Nanopore Technologies' 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. Currently, the most bullish analyst values Oxford Nanopore Technologies at UK£3.81 per share, while the most bearish prices it at UK£1.15. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Oxford Nanopore Technologies' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 13% growth on an annualised basis. This is compared to a historical growth rate of 22% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 20% annually. Factoring in the forecast slowdown in growth, it seems obvious that Oxford Nanopore Technologies is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Oxford Nanopore Technologies analysts - going out to 2026, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Oxford Nanopore Technologies , and understanding them should be part of your investment process.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
