Tango Therapeutics, Inc. (NASDAQ:TNGX) shareholders are probably feeling a little disappointed, since its shares fell 7.8% to US$8.50 in the week after its latest yearly results. Despite revenues of US$37m falling 5.4% short of expectations, statutory losses of US$1.08 per share were well contained, and in line with analyst models. 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. 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 six analysts covering Tango Therapeutics provided consensus estimates of US$32.4m revenue in 2024, which would reflect a considerable 11% decline over the past 12 months. Losses are forecast to balloon 33% to US$1.27 per share. Before this earnings announcement, the analysts had been modelling revenues of US$30.3m and losses of US$1.27 per share in 2024.
There were no major changes to the US$17.57consensus price target despite the higher revenue estimates, with the analysts seeming to believe that ongoing losses have a larger impact on the valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Tango Therapeutics analyst has a price target of US$20.00 per share, while the most pessimistic values it at US$16.00. This is a very narrow spread of estimates, implying either that Tango Therapeutics is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
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. We would highlight that revenue is expected to reverse, with a forecast 11% annualised decline to the end of 2024. That is a notable change from historical growth of 22% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 17% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Tango Therapeutics 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Tango Therapeutics going out to 2026, and you can see them free on our platform here.
You still need to take note of risks, for example - Tango Therapeutics has 3 warning signs we think 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.