Shareholders of C4 Therapeutics, Inc. (NASDAQ:CCCC) will be pleased this week, given that the stock price is up 13% to US$8.99 following its latest yearly results. Despite revenues of US$21m falling 3.6% short of expectations, statutory losses of US$2.67 per share were well contained, and in line with analyst models. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus from C4 Therapeutics' nine analysts is for revenues of US$23.9m in 2024. This would reflect a meaningful 15% increase on its revenue over the past 12 months. Losses are expected to hold steady at around US$1.94. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$22.5m and losses of US$2.37 per share in 2024. So it seems there's been a definite increase in optimism about C4 Therapeutics' future following the latest consensus numbers, with a cut to the loss per share forecasts in particular.
There was no major change to the consensus price target of US$15.09, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on C4 Therapeutics, with the most bullish analyst valuing it at US$60.00 and the most bearish at US$1.00 per share. 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.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that C4 Therapeutics' rate of growth is expected to accelerate meaningfully, with the forecast 15% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 1.9% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 17% per year. C4 Therapeutics is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. They also upgraded their revenue forecasts, although the latest estimates suggest that C4 Therapeutics will grow in line with the overall 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for C4 Therapeutics going out to 2026, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 3 warning signs for C4 Therapeutics (1 doesn't sit too well with us!) that 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.