As you might know, MacroGenics, Inc. (NASDAQ:MGNX) last week released its latest first-quarter, and things did not turn out so great for shareholders. It was not a great statutory result, with revenues coming in 39% lower than the analysts predicted. Unsurprisingly, earnings also fell seriously short of forecasts, turning into a per-share loss of US$0.84. 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.

Check out our latest analysis for MacroGenics

Following the latest results, MacroGenics' nine analysts are now forecasting revenues of US$68.9m in 2024. This would be a major 59% improvement in revenue compared to the last 12 months. Losses are forecast to balloon 694% to US$2.95 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$70.7m and losses of US$2.50 per share in 2024. So it's pretty clear the analysts have mixed opinions on MacroGenics after this update; revenues were downgraded and per-share losses expected to increase.

The average price target fell 39% to US$15.10, implicitly signalling that lower earnings per share are a leading indicator for MacroGenics' valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic MacroGenics analyst has a price target of US$25.00 per share, while the most pessimistic values it at US$7.00. 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. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on 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. The analysts are definitely expecting MacroGenics' growth to accelerate, with the forecast 86% annualised growth to the end of 2024 ranking favourably alongside historical growth of 9.9% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 18% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that MacroGenics is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on MacroGenics. Long-term earnings power is much more important than next year's profits. We have forecasts for MacroGenics going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - MacroGenics has 3 warning signs (and 2 which don't sit too well with us) we think 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.