Analysts Are Upgrading Silence Therapeutics plc (NASDAQ:SLN) After Its Latest Results
It's shaping up to be a tough period for Silence Therapeutics plc (NASDAQ:SLN), which a week ago released some disappointing yearly results that could have a notable impact on how the market views the stock. Unfortunately, Silence Therapeutics delivered a serious earnings miss. Revenues of UK£25m were 13% below expectations, and statutory losses ballooned 74% to UK£1.17 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for Silence Therapeutics
Taking into account the latest results, the current consensus from Silence Therapeutics' four analysts is for revenues of UK£26.3m in 2024. This would reflect a credible 3.7% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 67% to UK£0.37. Yet prior to the latest earnings, the analysts had been forecasting revenues of UK£22.8m and losses of UK£0.74 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.
It will come as no surprise to learn thatthe analysts have increased their price target for Silence Therapeutics 13% to US$55.80on the back of these upgrades. 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. Currently, the most bullish analyst values Silence Therapeutics at US$75.00 per share, while the most bearish prices it at US$42.00. 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.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Silence Therapeutics' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.7% growth on an annualised basis. This is compared to a historical growth rate of 58% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 17% annually. Factoring in the forecast slowdown in growth, it seems obvious that Silence Therapeutics is also expected to grow slower than other industry participants.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Silence Therapeutics analysts - going out to 2026, 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 Silence Therapeutics (1 is a bit concerning) you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
