Yahoo Finance Foghorn Therapeutics Inc. (NASDAQ:FHTX) Just Reported, And Analysts Assigned A US$11.67 Price Target
Last week, you might have seen that Foghorn Therapeutics Inc. (NASDAQ:FHTX) released its quarterly result to the market. The early response was not positive, with shares down 2.1% to US$5.98 in the past week. Statutory results overall were mixed, with revenues coming in 31% lower than the analysts predicted. What's really surprising is that losses of US$0.59 per share were 66% smaller than what was predicted. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Foghorn Therapeutics
Taking into account the latest results, the current consensus, from the five analysts covering Foghorn Therapeutics, is for revenues of US$24.2m in 2024. This implies a disturbing 29% reduction in Foghorn Therapeutics' revenue over the past 12 months. Losses are forecast to narrow 8.1% to US$2.01 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$35.3m and losses of US$4.04 per share in 2024. 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.
The analysts have cut their price target 18% to US$11.67per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Foghorn Therapeutics at US$16.00 per share, while the most bearish prices it at US$6.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 36% annualised decline to the end of 2024. That is a notable change from historical growth of 87% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 18% per year. It's pretty clear that Foghorn Therapeutics' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Yet - earnings are more important to the intrinsic value of the business. 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.
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 forecasts for Foghorn Therapeutics going out to 2026, and you can see them free on our platform here.
You still need to take note of risks, for example - Foghorn Therapeutics has 4 warning signs (and 1 which shouldn't be ignored) 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.
