Sema4 Holdings Corp. (NASDAQ:SMFR) Just Reported, And Analysts Assigned A US$3.75 Price Target

Simply Wall St
·3 min read

Sema4 Holdings Corp. (NASDAQ:SMFR) just released its latest second-quarter report and things are not looking great. Earnings missed the mark, with revenues of US$36m falling badly (46%) short of expectations. Losses were mildly higher, with a US$0.25 per-share loss being 4.2% above what the analysts modelled. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Sema4 Holdings

earnings-and-revenue-growth
earnings-and-revenue-growth

Taking into account the latest results, the most recent consensus for Sema4 Holdings from four analysts is for revenues of US$305.6m in 2022 which, if met, would be a sizeable 60% increase on its sales over the past 12 months. Losses are forecast to balloon 117% to US$0.97 per share. Before this latest report, the consensus had been expecting revenues of US$305.6m and US$0.89 per share in losses. So it's pretty clear consensus is mixed on Sema4 Holdings after the new consensus numbers; while the analysts held their revenue numbers steady, they also administered a moderate increase in per-share loss expectations.

With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 12% to US$3.75, with the analysts signalling that growing losses would be a definite concern. 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 Sema4 Holdings analyst has a price target of US$5.00 per share, while the most pessimistic values it at US$3.00. 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 Sema4 Holdings shareholders.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. One thing stands out from these estimates, which is that Sema4 Holdings is forecast to grow faster in the future than it has in the past, with revenues expected to display 156% annualised growth until the end of 2022. If achieved, this would be a much better result than the 11% annual decline over the past year. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 7.1% per year. Not only are Sema4 Holdings' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Sema4 Holdings' future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Sema4 Holdings going out to 2024, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 4 warning signs for Sema4 Holdings (2 are significant!) that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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