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The analysts might have been a bit too bullish on OmniAb, Inc. (NASDAQ:OABI), given that the company fell short of expectations when it released its quarterly results last week. Statutory earnings fell substantially short of expectations, with revenues of US$6.9m missing forecasts by 42%. Losses exploded, with a per-share loss of US$0.15 some 36% below prior forecasts. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for OmniAb
Taking into account the latest results, the six analysts covering OmniAb provided consensus estimates of US$49.9m revenue in 2023, which would reflect a sizeable 25% decline over the past 12 months. Per-share losses are expected to explode, reaching US$0.46 per share. Before this earnings announcement, the analysts had been modelling revenues of US$57.8m and losses of US$0.36 per share in 2023. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.
The average price target was broadly unchanged at US$10.00, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. 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 OmniAb, with the most bullish analyst valuing it at US$11.00 and the most bearish at US$8.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await OmniAb shareholders.
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 revenue is expected to reverse, with a forecast 43% annualised decline to the end of 2023. That is a notable change from historical growth of 72% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 6.4% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - OmniAb is expected to lag the wider industry.