Investors in Fulgent Genetics, Inc. (NASDAQ:FLGT) had a good week, as its shares rose 4.4% to close at US$21.49 following the release of its first-quarter results. It looks like the results were pretty good overall. While revenues of US$64m were in line with analyst predictions, statutory losses were much smaller than expected, with Fulgent Genetics losing US$0.45 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the current consensus, from the three analysts covering Fulgent Genetics, is for revenues of US$280.2m in 2024. This implies a measurable 2.6% reduction in Fulgent Genetics' revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 52% to US$2.67. Before this earnings announcement, the analysts had been modelling revenues of US$279.4m and losses of US$2.31 per share in 2024. So it's pretty clear the analysts have mixed opinions on Fulgent Genetics even after this update; although they reconfirmed their revenue numbers, it came at the cost of a considerable increase in per-share losses.
The consensus price target fell 14% to US$26.67per share, with the analysts clearly concerned by ballooning losses. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Fulgent Genetics, with the most bullish analyst valuing it at US$30.00 and the most bearish at US$25.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
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 3.4% annualised decline to the end of 2024. That is a notable change from historical growth of 22% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 6.7% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Fulgent Genetics is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Fulgent Genetics' revenue is expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on Fulgent Genetics. Long-term earnings power is much more important than next year's profits. We have forecasts for Fulgent Genetics going out to 2026, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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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.