It's been a good week for Genscript Biotech Corporation (HKG:1548) shareholders, because the company has just released its latest half-year results, and the shares gained 2.2% to HK$13.30. The results don't look great, especially considering that statutory losses grew 727% toUS$0.083 per share. Revenues of US$561m did beat expectations by 2.5%, but it looks like a bit of a cold comfort. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. 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 most recent consensus for Genscript Biotech from twelve analysts is for revenues of US$1.22b in 2024. If met, it would imply a substantial 21% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 25% to US$0.063. Before this latest report, the consensus had been expecting revenues of US$1.24b and US$0.047 per share in losses. So it's pretty clear the analysts have mixed opinions on Genscript Biotech even after this update; although they reconfirmed their revenue numbers, it came at the cost of a sizeable expansion in per-share losses.
As a result, there was no major change to the consensus price target of HK$23.12, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. 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. The most optimistic Genscript Biotech analyst has a price target of HK$29.10 per share, while the most pessimistic values it at HK$10.56. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Genscript Biotech's past performance and to peers in the same industry. The analysts are definitely expecting Genscript Biotech's growth to accelerate, with the forecast 46% annualised growth to the end of 2024 ranking favourably alongside historical growth of 26% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Genscript Biotech to grow faster than 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 Genscript Biotech. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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 Genscript Biotech going out to 2026, and you can see them free on our platform here..
It is also worth noting that we have found 1 warning sign for Genscript Biotech that you need to take into consideration.
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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.