As you might know, Calyxt, Inc. (NASDAQ:CLXT) just kicked off its latest third-quarter results with some very strong numbers. Revenues were better than expected, with US$5.2m in sales some 20% ahead of forecasts. The company still lost US$0.29 per share, although the losses were marginally smaller than the analysts expected. 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. 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 Calyxt's seven analysts is for revenues of US$28.1m in 2021, which would reflect a substantial 146% increase on its sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 23% to US$1.05. Before this earnings announcement, the analysts had been modelling revenues of US$27.6m and losses of US$1.05 per share in 2021.
The analysts trimmed their valuations, with the average price target falling 13% to US$5.71, with the ongoing losses seemingly weighing on sentiment, despite no real changes to the earnings forecasts. 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. There are some variant perceptions on Calyxt, with the most bullish analyst valuing it at US$8.00 and the most bearish at US$4.00 per share. 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.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We can infer from the latest estimates that forecasts expect a continuation of Calyxt'shistorical trends, as next year's 146% revenue growth is roughly in line with 127% annual revenue growth over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 20% per year. So although Calyxt is expected to maintain its revenue growth rate, it's definitely expected to grow faster 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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 Calyxt's future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on Calyxt. Long-term earnings power is much more important than next year's profits. We have forecasts for Calyxt going out to 2024, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 4 warning signs with Calyxt (at least 1 which is a bit unpleasant) , and understanding these should be part of your investment process.
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. 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.
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