LENZ Therapeutics, Inc. (NASDAQ:LENZ) investors will be delighted, with the company turning in some strong numbers with its latest results. Revenues of US$5.5m beat estimates by a substantial 131% margin. Unfortunately, LENZ Therapeutics also reported a statutory loss of US$1.02 per share, which at least was smaller than the analysts expected. 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.

Taking into account the latest results, the seven analysts covering LENZ Therapeutics provided consensus estimates of US$17.0m revenue in 2026, which would reflect a concerning 21% decline over the past 12 months. Losses are expected to increase slightly, to US$4.25 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$19.0m and losses of US$4.51 per share in 2026. We can see there's definitely been a change in sentiment in this update, with the analysts administering a meaningful downgrade to next year's revenue estimates, while at the same time reducing their loss estimates.

The consensus price target fell 16% to US$26.83, with the dip in revenue estimates clearly souring sentiment, despite the forecast reduction in losses. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on LENZ Therapeutics, with the most bullish analyst valuing it at US$60.00 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. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 37% by the end of 2026. This indicates a significant reduction from annual growth of 132% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 9.0% per year. It's pretty clear that LENZ Therapeutics' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, long term profitability is more important for the value creation process. 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 in mind, we wouldn't be too quick to come to a conclusion on LENZ Therapeutics. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple LENZ Therapeutics analysts - going out to 2028, and you can see them free on our platform here.

Don't forget that there may still be risks.

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.