Arcellx, Inc. (NASDAQ:ACLX) just released its quarterly report and things are looking bullish. The results were impressive, with revenues of US$39m exceeding analyst forecasts by 90%, and statutory losses of US$0.14 were likewise much smaller than the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Arcellx after the latest results.

After the latest results, the consensus from Arcellx's 13 analysts is for revenues of US$95.6m in 2024, which would reflect a painful 27% decline in revenue compared to the last year of performance. Losses are forecast to balloon 72% to US$1.63 per share. Before this latest report, the consensus had been expecting revenues of US$86.5m and US$2.13 per share in losses. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to this year's revenue estimates, while at the same time reducing their loss estimates.

There was no major change to the consensus price target of US$80.15, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Arcellx at US$87.00 per share, while the most bearish prices it at US$73.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 35% by the end of 2024. This indicates a significant reduction from annual growth of 635% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 18% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Arcellx is expected to lag 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. They also upgraded their revenue estimates for next year, even though it is expected to grow slower 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.

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 estimates - from multiple Arcellx analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Arcellx has 3 warning signs (and 1 which is concerning) we think you should know about.

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