Zai Lab Limited (NASDAQ:ZLAB) Just Released Its First-Quarter Results And Analysts Are Updating Their Estimates

Zai Lab Limited (NASDAQ:ZLAB) just released its first-quarter report and things are looking bullish. The results overall were pretty good, with revenues of US$87m exceeding expectations and statutory losses coming in at justUS$0.55 per share, some 41% below what the analysts had forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Zai Lab

Taking into account the latest results, the consensus forecast from Zai Lab's twelve analysts is for revenues of US$382.4m in 2024. This reflects a major 31% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 23% to US$2.62. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$379.5m and losses of US$3.27 per share in 2024. Although the revenue estimates have not really changed Zai Lab'sfuture looks a little different to the past, with a cut to the loss per share forecasts in particular.

There's been no major changes to the consensus price target of US$51.21, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock'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 Zai Lab analyst has a price target of US$66.00 per share, while the most pessimistic values it at US$23.50. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. We can infer from the latest estimates that forecasts expect a continuation of Zai Lab'shistorical trends, as the 44% annualised revenue growth to the end of 2024 is roughly in line with the 52% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 19% per year. So it's pretty clear that Zai Lab is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still 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 Zai Lab. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Zai Lab analysts - going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Zai Lab 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.