Legend Biotech Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
It's been a sad week for Legend Biotech Corporation (NASDAQ:LEGN), who've watched their investment drop 18% to US$18.54 in the week since the company reported its quarterly result. Revenues were US$360m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.26, an impressive 2,096% ahead of estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the consensus forecast from Legend Biotech's ten analysts is for revenues of US$1.70b in 2027. This reflects a major 25% improvement in revenue compared to the last 12 months. Legend Biotech is also expected to turn profitable, with statutory earnings of US$0.70 per share. In the lead-up to this report, the analysts had been modelling revenues of US$1.77b and earnings per share (EPS) of US$0.68 in 2027. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.
Check out our latest analysis for Legend Biotech
The average price target was reduced 6.9% to US$42.46, with the lower revenue forecasts indicating negative sentiment towards Legend Biotech, even though earnings forecasts were unchanged. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Legend Biotech at US$65.00 per share, while the most bearish prices it at US$24.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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. It's pretty clear that there is an expectation that Legend Biotech's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 19% growth on an annualised basis. This is compared to a historical growth rate of 53% over the past five years. Compare this to the 551 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 22% per year. So it's pretty clear that, while Legend Biotech's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. With that said, earnings are more important to the long-term value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Legend Biotech analysts - going out to 2028, and you can see them free on our platform here.
You can also see our analysis of Legend Biotech's Board and CEO remuneration and experience, and whether company insiders have been buying stock.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.