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MacroGenics, Inc. (NASDAQ:MGNX) defied analyst predictions to release its first-quarter results, which were ahead of market expectations. Revenues of US$13m beat estimates by a substantial 38% margin. Unfortunately, MacroGenics also reported a statutory loss of US$0.65 per share, which at least was smaller than the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus, from the six analysts covering MacroGenics, is for revenues of US$61.6m in 2025. This implies a concerning 60% reduction in MacroGenics' revenue over the past 12 months. Losses are forecast to balloon 168% to US$2.37 per share. Before this latest report, the consensus had been expecting revenues of US$62.5m and US$2.57 per share in losses. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrade to loss per share forecasts for this year.
See our latest analysis for MacroGenics
Even with the lower forecast losses, the analysts lowered their valuations, with the average price target falling 25% to US$4.50. It looks likethe analysts have become less optimistic about the overall business. 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. The most optimistic MacroGenics analyst has a price target of US$8.00 per share, while the most pessimistic values it at US$2.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. 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 MacroGenics' past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 71% annualised decline to the end of 2025. That is a notable change from historical growth of 7.1% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 17% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - MacroGenics is expected to lag the wider industry.