Galapagos NV (AMS:GLPG) just released its latest full-year report and things are not looking great. It was a pretty negative result overall, with revenues of €505m missing analyst predictions by 7.3%. Worse, the business reported a statutory loss of €3.32 per share, much 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Galapagos

Taking into account the latest results, the consensus forecast from Galapagos' seven analysts is for revenues of €581.3m in 2023, which would reflect a notable 15% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 65% to €1.17. Yet prior to the latest earnings, the analysts had been forecasting revenues of €554.0m and losses of €1.91 per share in 2023. So it seems there's been a definite increase in optimism about Galapagos' future following the latest consensus numbers, with a very favorable reduction to the loss per share forecasts in particular.

Yet despite these upgrades, the analysts cut their price target 8.0% to €47.62, implicitly signalling that the ongoing losses are likely to weigh negatively on Galapagos' 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. The most optimistic Galapagos analyst has a price target of €67.00 per share, while the most pessimistic values it at €40.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Galapagos shareholders.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Galapagos' rate of growth is expected to accelerate meaningfully, with the forecast 15% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 13% 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 21% per year. So it's clear that despite the acceleration in growth, Galapagos is expected to grow meaningfully slower than the industry average.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse 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 Galapagos' 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 Galapagos going out to 2025, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Galapagos .

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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.

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