US$1.25: That's What Analysts Think FibroGen, Inc. (NASDAQ:FGEN) Is Worth After Its Latest Results
As you might know, FibroGen, Inc. (NASDAQ:FGEN) last week released its latest full-year, and things did not turn out so great for shareholders. It was a pretty negative result overall, with revenues of US$148m missing analyst predictions by 9.9%. Additionally, the business reported a statutory loss of US$2.92 per share, larger than the analysts had forecast prior to the result. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Check out our latest analysis for FibroGen
After the latest results, the three analysts covering FibroGen are now predicting revenues of US$158.4m in 2024. If met, this would reflect a reasonable 7.2% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 53% to US$1.37. Before this latest report, the consensus had been expecting revenues of US$162.3m and US$1.32 per share in losses. So it's pretty clear consensus is more negative on FibroGen after the new consensus numbers; while the analysts trimmed their revenue estimates, they also administered a pronounced increase to per-share loss expectations.
The average price target fell 88% to US$1.25, implicitly signalling that lower earnings per share are a leading indicator for FibroGen'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 FibroGen analyst has a price target of US$2.00 per share, while the most pessimistic values it at US$0.50. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. 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. One thing stands out from these estimates, which is that FibroGen is forecast to grow faster in the future than it has in the past, with revenues expected to display 7.2% annualised growth until the end of 2024. If achieved, this would be a much better result than the 12% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 18% annually for the foreseeable future. So although FibroGen's revenue growth is expected to improve, it is still expected to grow slower than the industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at FibroGen. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for FibroGen going out to 2026, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 5 warning signs for FibroGen (3 can't be ignored!) that you need to be mindful 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.
