As you might know, Septerna, Inc. (NASDAQ:SEPN) last week released its latest third-quarter, and things did not turn out so great for shareholders. It was a pretty negative result overall, with revenues of US$19m missing analyst predictions by 9.1%. Worse, the business reported a statutory loss of US$0.57 per share, much larger than the analysts had forecast prior to the result. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the current consensus, from the nine analysts covering Septerna, is for revenues of US$68.7m in 2027. This implies a disturbing 29% reduction in Septerna's revenue over the past 12 months. Per-share losses are expected to explode, reaching US$2.41 per share. Before this earnings announcement, the analysts had been modelling revenues of US$73.6m and losses of US$2.28 per share in 2027. So it's pretty clear consensus is more negative on Septerna after the new consensus numbers; while the analysts trimmed their revenue estimates, they also administered a modest increase to per-share loss expectations.
See our latest analysis for Septerna
The analysts lifted their price target 9.2% to US$59.22, implicitly signalling that lower earnings per share are not expected to have a longer-term impact on the stock's value. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Septerna at US$65.00 per share, while the most bearish prices it at US$48.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Septerna's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 24% by the end of 2027. This indicates a significant reduction from annual growth of 135% 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 8.6% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Septerna is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Septerna. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Septerna going out to 2028, and you can see them free on our platform here..
You still need to take note of risks, for example - Septerna has 2 warning signs (and 1 which is a bit concerning) we think you should know about.
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