Silence Therapeutics plc (LON:SLN) last week reported its latest half-year results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues came in at UK£1.1m, a whole 36% below what the analysts were forecasting. Losses were a (relative) bright spot by comparison, with a per-share (statutory) loss of UK£0.14 substantially smaller than what was expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following the latest results, Silence Therapeutics' four analysts are now forecasting revenues of UK£8.66m in 2020. This would be a sizeable 523% improvement in sales compared to the last 12 months. The loss per share is expected to ameliorate slightly, reducing to UK£0.26. Yet prior to the latest earnings, the analysts had been forecasting revenues of UK£8.26m and losses of UK£0.26 per share in 2020. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrades to both revenue and loss per share forecasts for this year.
It will come as no surprise to learn thatthe analysts have increased their price target for Silence Therapeutics 306% to UK£9.08on the back of these upgrades. 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 Silence Therapeutics analyst has a price target of UK£15.00 per share, while the most pessimistic values it at UK£6.05. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Silence Therapeutics' growth to accelerate, with the forecast 5x growth ranking favourably alongside historical growth of 24% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.4% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Silence Therapeutics is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Silence Therapeutics going out to 2024, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 4 warning signs for Silence Therapeutics (1 is concerning!) 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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