TG Therapeutics, Inc. (NASDAQ:TGTX) Just Reported Second-Quarter Earnings And Analysts Are Lifting Their Estimates
As you might know, TG Therapeutics, Inc. (NASDAQ:TGTX) last week released its latest quarterly, and things did not turn out so great for shareholders. Unfortunately, TG Therapeutics delivered a serious earnings miss. Revenues of US$16m were 10% below expectations, and statutory losses ballooned 34% to US$0.34 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.
Check out our latest analysis for TG Therapeutics
After the latest results, the eight analysts covering TG Therapeutics are now predicting revenues of US$126.4m in 2023. If met, this would reflect a huge 425% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 48% to US$0.65. Before this earnings announcement, the analysts had been modelling revenues of US$90.9m and losses of US$0.89 per share in 2023. 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.
Yet despite these upgrades, the analysts cut their price target 8.4% to US$29.06, implicitly signalling that the ongoing losses are likely to weigh negatively on TG Therapeutics' valuation. 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 TG Therapeutics at US$41.00 per share, while the most bearish prices it at US$6.00. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
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. It's clear from the latest estimates that TG Therapeutics' rate of growth is expected to accelerate meaningfully, with the forecast 25x annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 75% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 16% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect TG Therapeutics 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, they also upgraded their revenue estimates, and are forecasting them 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 TG Therapeutics' future valuation.
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 forecasts for TG Therapeutics going out to 2025, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 4 warning signs for TG Therapeutics (1 doesn't sit too well with us!) that you should be aware of.
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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.
