Fate Therapeutics, Inc. (NASDAQ:FATE) just released its quarterly report and things are looking bullish. Overall results were decent, with revenues of US$3.1m beating estimates by113%. Statutory losses were subsequently less thanthe analysts had expected, at US$0.40 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Fate Therapeutics after the latest results.
Following the recent earnings report, the consensus from twelve analysts covering Fate Therapeutics is for revenues of US$4.21m in 2025. This implies a disturbing 69% decline in revenue compared to the last 12 months. Per-share losses are predicted to creep up to US$1.71. Before this latest report, the consensus had been expecting revenues of US$3.88m and US$1.66 per share in losses. So it's pretty clear consensus is mixed on Fate Therapeutics after the new consensus numbers; while the analysts lifted revenue numbers, they also administered a moderate increase in per-share loss expectations.
The consensus price target stayed unchanged at US$6.38, seeming to suggest that higher forecast losses are not expected to have a long term impact on the valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Fate Therapeutics analyst has a price target of US$12.00 per share, while the most pessimistic values it at US$3.50. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Fate Therapeutics' past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 61% annualised decline to the end of 2025. That is a notable change from historical growth of 20% 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 22% annually for the foreseeable future. It's pretty clear that Fate Therapeutics' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Fate Therapeutics. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Fate 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 4 warning signs for Fate Therapeutics (of which 1 is a bit unpleasant!) 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.
