The analysts might have been a bit too bullish on Metagenomi Therapeutics, Inc. (NASDAQ:MGX), given that the company fell short of expectations when it released its quarterly results last week. It was not a great statutory result, with revenues coming in 107% lower than the analysts predicted. Unsurprisingly, earnings also fell seriously short of forecasts, turning into a per-share loss of US$0.73. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the consensus from Metagenomi Therapeutics' five analysts is for revenues of US$7.71m in 2026, which would reflect a concerning 43% decline in revenue compared to the last year of performance. The loss per share is expected to ameliorate slightly, reducing to US$2.35. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$10.2m and losses of US$2.15 per share in 2026. There's been a definite change in sentiment in this update, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.
See our latest analysis for Metagenomi Therapeutics
The average price target fell 13% to US$7.00, implicitly signalling that lower earnings per share are a leading indicator for Metagenomi Therapeutics' valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Metagenomi Therapeutics, with the most bullish analyst valuing it at US$9.00 and the most bearish at US$5.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. Over the past three years, revenues have declined around 21% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 68% decline in revenue until the end of 2026. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 23% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Metagenomi Therapeutics to suffer worse than the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Metagenomi Therapeutics. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Metagenomi Therapeutics' future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Metagenomi Therapeutics analysts - going out to 2028, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Metagenomi Therapeutics (1 is significant) you should be aware of.
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