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Investors in Zai Lab Limited (NASDAQ:ZLAB) had a good week, as its shares rose 2.5% to close at US$34.64 following the release of its annual results. Revenue hit US$399m in line with forecasts, although the company reported a statutory loss per share of US$2.60 that was somewhat smaller than the analysts 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for Zai Lab
Taking into account the latest results, the current consensus from Zai Lab's 13 analysts is for revenues of US$571.7m in 2025. This would reflect a sizeable 43% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 41% to US$1.40. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$567.8m and losses of US$1.73 per share in 2025. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a cut to losses per share in particular.
The average price target held steady at US$52.54, seeming to indicate that business is performing in line with expectations. 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 Zai Lab analyst has a price target of US$74.00 per share, while the most pessimistic values it at US$29.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Zai Lab'shistorical trends, as the 43% annualised revenue growth to the end of 2025 is roughly in line with the 43% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 20% per year. So although Zai Lab is expected to maintain its revenue growth rate, it's definitely 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. 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.