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Veracyte, Inc. (NASDAQ:VCYT) just released its quarterly report and things are looking bullish. The company beat forecasts, with revenue of US$114m, some 3.2% above estimates, and statutory earnings per share (EPS) coming in at US$0.09, 260% ahead of expectations. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
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Following the latest results, Veracyte's eleven analysts are now forecasting revenues of US$492.7m in 2025. This would be a reasonable 6.3% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 20% to US$0.51. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$488.3m and earnings per share (EPS) of US$0.48 in 2025. So the consensus seems to have become somewhat more optimistic on Veracyte's earnings potential following these results.
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The consensus price target fell 5.2% to US$40.00, suggesting the increase in earnings forecasts was not enough to offset other the analysts concerns. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Veracyte analyst has a price target of US$45.00 per share, while the most pessimistic values it at US$29.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Veracyte's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 8.5% growth on an annualised basis. This is compared to a historical growth rate of 28% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 18% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Veracyte.