The analysts might have been a bit too bullish on Tango Therapeutics, Inc. (NASDAQ:TNGX), given that the company fell short of expectations when it released its first-quarter results last week. Earnings fell badly short of analyst estimates, with US$6.5m revenue falling -14% short, and statutory losses of US$0.35 per share being -12% greater than 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
After the latest results, the consensus from Tango Therapeutics' seven analysts is for revenues of US$32.4m in 2024, which would reflect a chunky 13% decline in revenue compared to the last year of performance. Per-share losses are expected to explode, reaching US$1.39 per share. Before this latest report, the consensus had been expecting revenues of US$30.7m and US$1.28 per share in losses. So it's pretty clear consensus is mixed on Tango Therapeutics after the new consensus numbers; while the analysts lifted revenue numbers, they also administered a moderate increase in per-share loss expectations.
There was no major change to the consensus price target of US$17.57, with growing revenues seemingly enough to offset the concern of growing losses. 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. Currently, the most bullish analyst values Tango Therapeutics at US$20.00 per share, while the most bearish prices it at US$16.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 17% by the end of 2024. This indicates a significant reduction from annual growth of 14% 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 19% 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 important thing to note is the forecast of increased losses next year, suggesting all may not be well at Tango Therapeutics. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse 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.
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. At Simply Wall St, we have a full range of analyst estimates for Tango Therapeutics going out to 2026, and you can see them free on our platform here..
Plus, you should also learn about the 3 warning signs we've spotted with Tango Therapeutics (including 1 which is significant) .
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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.