IDEAYA Biosciences, Inc. (NASDAQ:IDYA) came out with its quarterly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues fell badly short of expectations, with sales of US$9.0m missing analyst predictions by 85%. Statutory earnings correspondingly nosedived, with IDEAYA Biosciences reporting a loss of US$0.17 per share, where the analysts were expecting a profit. 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.
See our latest analysis for IDEAYA Biosciences
Taking into account the latest results, the current consensus from IDEAYA Biosciences' seven analysts is for revenues of US$28.5m in 2021, which would reflect a major 218% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 22% to US$1.39. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$20.2m and losses of US$1.31 per share in 2021. Ergo, there's been a clear change in sentiment, with the analysts lifting next year's revenue estimates, while at the same time increasing their loss per share numbers to reflect the cost of achieving this growth.
The consensus price target stayed unchanged at US$24.56, seeming to suggest that higher forecast losses are not expected to have a long term impact on the 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. There are some variant perceptions on IDEAYA Biosciences, with the most bullish analyst valuing it at US$28.00 and the most bearish at US$20.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at IDEAYA Biosciences. 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.
With that in mind, we wouldn't be too quick to come to a conclusion on IDEAYA Biosciences. Long-term earnings power is much more important than next year's profits. We have forecasts for IDEAYA Biosciences going out to 2024, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 3 warning signs for IDEAYA Biosciences (1 doesn't sit too well with us!) that you should be aware of.
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.
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