A week ago, Assembly Biosciences, Inc. (NASDAQ:ASMB) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. Revenues were better than expected, with US$8.2m in revenue some 18% ahead of forecasts. The company still lost US$0.54 per share, although the losses were marginally smaller than the analysts 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Taking into account the latest results, the current consensus, from the four analysts covering Assembly Biosciences, is for revenues of US$31.5m in 2026. This implies a substantial 56% reduction in Assembly Biosciences' revenue over the past 12 months. Per-share losses are expected to explode, reaching US$2.84 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$41.8m and losses of US$1.46 per share in 2026. There's been a definite change in sentiment in this update, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

There was no major change to the consensus price target of US$48.75, signalling that the business is performing roughly in line with expectations, despite lower earnings per share 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. The most optimistic Assembly Biosciences analyst has a price target of US$62.00 per share, while the most pessimistic values it at US$40.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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 66% by the end of 2026. This indicates a significant reduction from annual growth of 27% 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 22% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Assembly Biosciences is expected to lag 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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Assembly Biosciences going out to 2028, and you can see them free on our platform here.

You still need to take note of risks, for example - Assembly Biosciences has 2 warning signs (and 1 which can't be ignored) we think you should know about.

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.