aTyr Pharma, Inc. (NASDAQ:LIFE) just released its latest yearly results and things are looking bullish. Revenues of US$10m beat estimates by a substantial 4,054% margin. Unfortunately, aTyr Pharma also reported a statutory loss of US$1.60 per share, which at least was 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for aTyr Pharma

Taking into account the latest results, the current consensus, from the six analysts covering aTyr Pharma, is for revenues of US$6.75m in 2023, which would reflect a painful 35% reduction in aTyr Pharma's sales over the past 12 months. Per-share losses are expected to explode, reaching US$1.36 per share. Before this earnings announcement, the analysts had been modelling revenues of US$10.1m and losses of US$1.43 per share in 2023. We can see there's definitely been a change in sentiment in this update, with the analysts administering a meaningful downgrade to next year's revenue estimates, while at the same time reducing their loss estimates.

There was no major change to the US$19.83average price target, suggesting that the adjustments to revenue and earnings are not expected to have a long-term impact on the business. 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. Currently, the most bullish analyst values aTyr Pharma at US$35.00 per share, while the most bearish prices it at US$9.00. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the aTyr Pharma's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 35% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 30% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 14% per year. It's pretty clear that aTyr Pharma's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, long term profitability is more important for the value creation process. 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 estimates - from multiple aTyr Pharma analysts - going out to 2025, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for aTyr Pharma (1 can't be ignored!) that we have uncovered.

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