A week ago, Intellia Therapeutics, Inc. (NASDAQ:NTLA) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. Revenues were better than expected, with US$9.1m in revenue some 16% ahead of forecasts. The company still lost US$1.34 per share, although the losses were marginally smaller than the analysts expected. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following the latest results, Intellia Therapeutics' 27 analysts are now forecasting revenues of US$60.6m in 2025. This would be a sizeable 41% improvement in revenue compared to the last 12 months. Losses are expected to increase slightly, to US$5.52 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$58.5m and losses of US$5.50 per share in 2025.
There were no major changes to the US$62.48consensus 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 Intellia Therapeutics, with the most bullish analyst valuing it at US$144 and the most bearish at US$14.00 per share. 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. 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. The analysts are definitely expecting Intellia Therapeutics' growth to accelerate, with the forecast 31% annualised growth to the end of 2025 ranking favourably alongside historical growth of 0.3% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 21% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Intellia Therapeutics to grow faster than 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. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster 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 forecasts for Intellia Therapeutics going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 2 warning signs for Intellia Therapeutics 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.
