C4 Therapeutics, Inc. (NASDAQ:CCCC) Just Reported And Analysts Have Been Lifting Their Price Targets
Last week, you might have seen that C4 Therapeutics, Inc. (NASDAQ:CCCC) released its third-quarter result to the market. The early response was not positive, with shares down 8.0% to US$3.10 in the past week. Revenues of US$8.5m were in line with expectations, although statutory losses per share were US$0.16, some 18% smaller than was 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following the recent earnings report, the consensus from seven analysts covering C4 Therapeutics is for revenues of US$22.4m in 2027. This implies a concerning 31% decline in revenue compared to the last 12 months. Losses are forecast to balloon 24% to US$0.92 per share. Before this latest report, the consensus had been expecting revenues of US$22.4m and US$0.92 per share in losses.
View our latest analysis for C4 Therapeutics
The consensus price target rose 8.0% to US$12.50, with the analysts increasing their valuations as the business executes in line with forecasts. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on C4 Therapeutics, with the most bullish analyst valuing it at US$30.00 and the most bearish at US$7.00 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. 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 C4 Therapeutics' past performance and to peers in the same industry. One more thing stood out to us about these estimates, and it's the idea that C4 Therapeutics' decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 25% to the end of 2027. This tops off a historical decline of 3.9% a year 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 revenue grow 22% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect C4 Therapeutics to suffer worse 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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on C4 Therapeutics. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple C4 Therapeutics analysts - going out to 2028, and you can see them free on our platform here.
Even so, be aware that C4 Therapeutics is showing 2 warning signs in our investment analysis , you should know about...
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