It's been a pretty great week for NGM Biopharmaceuticals, Inc. (NASDAQ:NGM) shareholders, with its shares surging 12% to US$14.15 in the week since its latest third-quarter results. Revenues came in 21% better than analyst models expected, at US$22m, although losses ballooned 49% to US$0.17, which is much worse than what was forecast. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts 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 forecasts to see what analysts are expecting for next year.
After the latest results, the consensus from NGM Biopharmaceuticals's four analysts is for revenues of US$83.5m in 2020, which would reflect a substantial 30% decline in sales compared to the last year of performance. Losses are predicted to fall substantially, shrinking 246% to US$1.25. Before this earnings announcement, analysts had been forecasting revenues of US$83.5m and losses of US$1.17 per share in 2020. Although the revenue estimates have not really changed, we can see there's been a earnings per share expectations, suggesting that analysts have become more bullish after the latest result.
The consensus price target held steady at US$25.20, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic NGM Biopharmaceuticals analyst has a price target of US$29.00 per share, while the most pessimistic values it at US$22.00. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
Further, we can compare these estimates to past performance, and see how NGM Biopharmaceuticals forecasts compare to the wider market's forecast performance. These estimates imply that sales are expected to slow, with a forecast revenue decline of 30% a significant reduction from annual growth of 18% over the last three years. Compare this with our data, which suggests that other companies in the same market are, in aggregate, expected to see their revenue grow 5.5% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - analysts also expect NGM Biopharmaceuticals to grow slower than the wider market.
The Bottom Line
The most obvious conclusion is that analysts made no changes to their forecasts for a loss next year. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. 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.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for NGM Biopharmaceuticals going out to 2023, and you can see them free on our platform here..
We also provide an overview of the NGM Biopharmaceuticals Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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.
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