US$17.40: That's What Analysts Think Molecular Templates, Inc. (NASDAQ:MTEM) Is Worth After Its Latest Results
Shareholders might have noticed that Molecular Templates, Inc. (NASDAQ:MTEM) filed its quarterly result this time last week. The early response was not positive, with shares down 3.2% to US$8.56 in the past week. Statutory losses were much smaller than expected, at just US$0.47 per share, even though revenues of US$4.3m missed analyst expectations by a remarkable 26%. 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. With this in mind, we’ve gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for Molecular Templates
Taking into account the latest results, the most recent consensus for Molecular Templates from six analysts is for revenues of US$22.9m in 2021 which, if met, would be a reasonable 6.1% increase on its sales over the past 12 months. Per-share losses are predicted to creep up to US$2.20. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$23.8m and losses of US$2.33 per share in 2021. It looks like there’s been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers fell somewhat.
The consensus price target fell 18% to US$17.40, with the dip in revenue estimates clearly souring sentiment, despite the forecast reduction in losses. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company’s valuation. There are some variant perceptions on Molecular Templates, with the most bullish analyst valuing it at US$25.00 and the most bearish at US$14.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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 pretty clear that there is an expectation that Molecular Templates’ revenue growth will slow down substantially, with revenues next year expected to grow 6.1%, compared to a historical growth rate of 54% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 20% per year. So it’s pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Molecular Templates.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. Still, earnings are more important to the intrinsic value of the business. 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 said, the long-term trajectory of the company’s earnings is a lot more important than next year. We have estimates – from multiple Molecular Templates analysts – going out to 2024, and you can see them free on our platform here.
However, before you get too enthused, we’ve discovered 3 warning signs for Molecular Templates that you should be aware of.
This article by Simply Wall St is general in nature. 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.
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