4D Molecular Therapeutics, Inc. (NASDAQ:FDMT) Consensus Forecasts Have Become A Little Darker Since Its Latest Report
Investors in 4D Molecular Therapeutics, Inc. (NASDAQ:FDMT) had a good week, as its shares rose 8.0% to close at US$29.37 following the release of its yearly results. It was a moderately negative result overall - revenue fell 8.4% short of analyst estimates at US$21m, and statutory losses were in line with analyst expectations, at US$2.58 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on 4D Molecular Therapeutics after the latest results.
See our latest analysis for 4D Molecular Therapeutics
Taking into account the latest results, the current consensus, from the seven analysts covering 4D Molecular Therapeutics, is for revenues of US$4.26m in 2024. This implies a painful 79% reduction in 4D Molecular Therapeutics' revenue over the past 12 months. Losses are forecast to balloon 47% to US$2.97 per share. Before this earnings announcement, the analysts had been modelling revenues of US$6.40m and losses of US$3.02 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue forecasts while also making no real change to the loss per share numbers.
There was no real change to the average price target of US$50.11, suggesting that the revisions to revenue estimates are not expected to have a long-term impact on 4D Molecular Therapeutics' valuation. 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. The most optimistic 4D Molecular Therapeutics analyst has a price target of US$82.00 per share, while the most pessimistic values it at US$30.00. 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.
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 five years, revenues have declined around 3.0% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 79% decline in revenue until the end of 2024. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 18% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect 4D Molecular Therapeutics to suffer 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 underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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.
With that in mind, we wouldn't be too quick to come to a conclusion on 4D Molecular Therapeutics. 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 4D Molecular Therapeutics going out to 2026, and you can see them free on our platform here..
Plus, you should also learn about the 4 warning signs we've spotted with 4D Molecular Therapeutics (including 3 which are potentially serious) .
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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.
