Analysts Have Made A Financial Statement On Alector, Inc.'s (NASDAQ:ALEC) First-Quarter Report
The analysts might have been a bit too bullish on Alector, Inc. (NASDAQ:ALEC), given that the company fell short of expectations when it released its quarterly results last week. It definitely looks like a negative result overall with revenues falling 20% short of analyst estimates at US$7.2m. Statutory losses were US$0.53 per share, 28% bigger than what the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Alector after the latest results.
Check out our latest analysis for Alector
After the latest results, the six analysts covering Alector are now predicting revenues of US$39.6m in 2020. If met, this would reflect a substantial 74% improvement in sales compared to the last 12 months. Per-share losses are predicted to creep up to US$1.94. Before this earnings announcement, the analysts had been modelling revenues of US$34.4m and losses of US$1.83 per share in 2020. Ergo, there's been a clear change in sentiment, with the analysts lifting this year's revenue estimates, while at the same time increasing their loss per share numbers to reflect the cost of achieving this growth.
There was no major change to the consensus price target of US$34.29, with growing revenues seemingly enough to offset the concern of growing losses. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Alector, with the most bullish analyst valuing it at US$44.00 and the most bearish at US$28.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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. For example, we noticed that Alector's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 74%, well above its historical decline of 20% a year over the past year. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 24% per year. So it looks like Alector is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. The consensus price target held steady at US$34.29, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Alector going out to 2024, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 3 warning signs for Alector you should be aware of.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
