The analysts might have been a bit too bullish on Silence Therapeutics plc (NASDAQ:SLN), given that the company fell short of expectations when it released its quarterly results last week. It was not a great statutory result, with revenues coming in 97% lower than the analysts predicted. Unsurprisingly, earnings also fell seriously short of forecasts, turning into a per-share loss of US$0.60. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the six analysts covering Silence Therapeutics are now predicting revenues of US$32.7m in 2025. If met, this would reflect a solid 18% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 39% to US$0.92. Before this latest report, the consensus had been expecting revenues of US$36.6m and US$0.97 per share in losses. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue forecasts while also reducing the estimated losses the business will incur.
See our latest analysis for Silence Therapeutics
There was no major change to the US$37.26average price target, suggesting that the adjustments to revenue and earnings are not expected to have a long-term impact on the business. 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. There are some variant perceptions on Silence Therapeutics, with the most bullish analyst valuing it at US$75.00 and the most bearish at US$15.00 per share. 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.
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. We would highlight that Silence Therapeutics' revenue growth is expected to slow, with the forecast 25% annualised growth rate until the end of 2025 being well below the historical 32% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 18% annually. Even after the forecast slowdown in growth, it seems obvious that Silence Therapeutics is also expected to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. They also downgraded Silence Therapeutics' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Still, earnings per share are more important to value creation for shareholders. The consensus price target held steady at US$37.26, with the latest estimates not enough to have an impact on their price targets.
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. We have estimates - from multiple Silence Therapeutics analysts - going out to 2027, and you can see them free on our platform here.
You still need to take note of risks, for example - Silence Therapeutics has 1 warning sign we think you should be aware of.
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