Shareholders might have noticed that 4D Molecular Therapeutics, Inc. (NASDAQ:FDMT) filed its quarterly result this time last week. The early response was not positive, with shares down 8.0% to US$14.80 in the past week. Revenues fell -99% short of what the analysts had expected, coming in at US$5.0k. Statutory losses were somewhat milder than expected, coming in with a loss of US$0.63 per share. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following the recent earnings report, the consensus from six analysts covering 4D Molecular Therapeutics is for revenues of US$6.69m in 2024. This implies a substantial 67% decline in revenue compared to the last 12 months. Losses are forecast to balloon 34% to US$2.84 per share. Before this latest report, the consensus had been expecting revenues of US$5.56m and US$2.89 per share in losses. So there's definitely been a change in sentiment in this update, with the analysts upgrading this year's revenue estimates, while at the same time holding losses per share steady.
There were no major changes to the US$50.60consensus price target despite the higher revenue estimates, with the analysts seeming to believe that ongoing losses have a larger impact on the 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. There are some variant perceptions on 4D Molecular Therapeutics, with the most bullish analyst valuing it at US$82.00 and the most bearish at US$36.00 per share. 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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 89% by the end of 2024. This indicates a significant reduction from annual growth of 6.0% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 23% annually for the foreseeable future. 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 obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. The consensus price target held steady at US$50.60, 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 forecasts for 4D Molecular Therapeutics going out to 2026, and you can see them free on our platform here.
It is also worth noting that we have found 3 warning signs for 4D Molecular Therapeutics (1 is a bit concerning!) that you need to take into consideration.
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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.