It's been a good week for Repare Therapeutics Inc. (NASDAQ:RPTX) shareholders, because the company has just released its latest first-quarter results, and the shares gained 8.7% to US$3.64. Revenues of 36% beat expectations by US$52m and was sufficient to generate a statutory profit of US$0.30 - a pleasant surprise given that the analysts were forecasting a loss! 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Following the recent earnings report, the consensus from five analysts covering Repare Therapeutics is for revenues of US$56.2m in 2024. This implies a disturbing 43% decline in revenue compared to the last 12 months. Losses are forecast to balloon 106% to US$2.22 per share. Before this latest report, the consensus had been expecting revenues of US$45.2m and US$2.68 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

There was no major change to the consensus price target of US$15.33, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Repare Therapeutics, with the most bullish analyst valuing it at US$25.00 and the most bearish at US$8.00 per share. 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. 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. We would highlight that revenue is expected to reverse, with a forecast 52% annualised decline to the end of 2024. That is a notable change from historical growth of 70% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 18% annually for the foreseeable future. It's pretty clear that Repare Therapeutics' 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. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. The consensus price target held steady at US$15.33, with the latest estimates not enough to have an impact on their price targets.

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

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Repare Therapeutics (at least 1 which is a bit unpleasant) , and understanding them should be part of your investment process.

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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.