Last week, you might have seen that 4D Molecular Therapeutics, Inc. (NASDAQ:FDMT) released its first-quarter result to the market. The early response was not positive, with shares down 2.6% to US$25.70 in the past week. Revenue was dismal, with revenues of US$28k coming in some 98% below forecasts. The only bright spot was that statutory losses of US$0.66 per share were 11% smaller than the analysts had predicted. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the current consensus, from the six analysts covering 4D Molecular Therapeutics, is for revenues of US$8.43m in 2024. This implies a painful 59% reduction in 4D Molecular Therapeutics' revenue over the past 12 months. Losses are forecast to balloon 50% to US$3.03 per share. Before this latest report, the consensus had been expecting revenues of US$6.35m and US$3.12 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.
Despite these upgrades,the analysts have not made any major changes to their price target of US$52.30, implying that their latest estimates don't have a long term impact on what they think the stock is worth. 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. The most optimistic 4D Molecular Therapeutics analyst has a price target of US$82.00 per share, while the most pessimistic values it at US$35.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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 69% by the end of 2024. This indicates a significant reduction from annual growth of 1.9% 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 - 4D Molecular 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. They also upgraded their revenue estimates for next year, even though it is expected to grow slower 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.
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 4D Molecular Therapeutics analysts - going out to 2026, and you can see them free on our platform here.
Even so, be aware that 4D Molecular Therapeutics is showing 2 warning signs in our investment analysis , you should know about...
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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.