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MacroGenics, Inc. (NASDAQ:MGNX) Just Released Its Third-Quarter Earnings: Here's What Analysts Think

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MacroGenics, Inc. (NASDAQ:MGNX) just released its quarterly report and things are looking bullish. The results were impressive, with revenues of US$18m exceeding analyst forecasts by 32%, and statutory losses of US$0.66 were likewise much smaller than the analysts had forecast. 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.

View our latest analysis for MacroGenics

earnings-and-revenue-growth
earnings-and-revenue-growth

After the latest results, the seven analysts covering MacroGenics are now predicting revenues of US$164.9m in 2021. If met, this would reflect a major 112% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 42% to US$1.95. Before this latest report, the consensus had been expecting revenues of US$153.0m and US$1.81 per share in losses. So it's pretty clear consensus is mixed on MacroGenics after the new consensus numbers; while the analysts lifted revenue numbers, they also administered a per-share loss expectations.

The consensus price target stayed unchanged at US$28.22, seeming to suggest that higher forecast losses are not expected to have a long term impact on the valuation. 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. There are some variant perceptions on MacroGenics, with the most bullish analyst valuing it at US$38.00 and the most bearish at US$13.00 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.

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. One thing stands out from these estimates, which is that MacroGenics is forecast to grow faster in the future than it has in the past, with revenues expected to grow 112%. If achieved, this would be a much better result than the 2.0% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 20% per year. Not only are MacroGenics' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than 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. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. 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.

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. At Simply Wall St, we have a full range of analyst estimates for MacroGenics going out to 2024, and you can see them free on our platform here..

It is also worth noting that we have found 3 warning signs for MacroGenics that you need to take into consideration.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.