Foghorn Therapeutics Inc. (NASDAQ:FHTX) just released its latest second-quarter results and things are looking bullish. Revenue crushed expectations at US$16m, beating expectations by 103%. Foghorn Therapeutics reported a statutory loss of US$0.10 per share, which - although not amazing - was much smaller than the analysts predicted. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

After the latest results, the consensus from Foghorn Therapeutics' ten analysts is for revenues of US$35.8m in 2026, which would reflect a noticeable 2.5% decline in revenue compared to the last year of performance. The loss per share is expected to greatly reduce in the near future, narrowing 26% to US$0.81. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$25.8m and losses of US$1.02 per share in 2026. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to this year's revenue estimates, while at the same time reducing their loss estimates.

Despite these upgrades,the analysts have not made any major changes to their price target of US$11.44, implying that their latest estimates don't have a long term impact on what they think the stock is worth. 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. Currently, the most bullish analyst values Foghorn Therapeutics at US$14.00 per share, while the most bearish prices it at US$9.00. 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 Foghorn Therapeutics shareholders.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 4.8% by the end of 2026. This indicates a significant reduction from annual growth of 28% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 23% per year. It's pretty clear that Foghorn Therapeutics' revenues are expected to perform substantially 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. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. The consensus price target held steady at US$11.44, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Foghorn Therapeutics going out to 2028, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Foghorn Therapeutics (at least 1 which is a bit concerning) , and understanding them should be part of your investment process.

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.