Wave Life Sciences Ltd. (NASDAQ:WVE) just released its latest quarterly report and things are not looking great. It was not a great statutory result, with revenues coming in 159% lower than the analysts predicted. Unsurprisingly, earnings also fell seriously short of forecasts, turning into a per-share loss of US$0.47. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the consensus forecast from Wave Life Sciences' ten analysts is for revenues of US$63.4m in 2025. This reflects a notable 18% improvement in revenue compared to the last 12 months. Per-share losses are supposed to see a sharp uptick, reaching US$1.06. Before this latest report, the consensus had been expecting revenues of US$64.5m and US$0.98 per share in losses. Overall it looks as though the analysts were a bit mixed on the latest consensus updates. Although revenue forecasts held steady, the consensus also made a pronounced increase to its losses per share forecasts.
Despite expectations of heavier losses next year,the analysts have lifted their price target 12% to US$22.20, perhaps implying these losses are not expected to be recurring over the long term. 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. There are some variant perceptions on Wave Life Sciences, with the most bullish analyst valuing it at US$36.00 and the most bearish at US$15.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Wave Life Sciences' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Wave Life Sciences' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 14% growth on an annualised basis. This is compared to a historical growth rate of 40% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 10% per year. Even after the forecast slowdown in growth, it seems obvious that Wave Life Sciences is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Wave Life Sciences. Long-term earnings power is much more important than next year's profits. We have forecasts for Wave Life Sciences 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 Wave Life Sciences (2 shouldn't be ignored!) 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.
