Foghorn Therapeutics Inc. (NASDAQ:FHTX) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. Foghorn Therapeutics has also found favour with investors, with the stock up an incredible 36% to US$6.59 over the past week. Could this upgrade be enough to drive the stock even higher?

Following the upgrade, the consensus from ten analysts covering Foghorn Therapeutics is for revenues of US$34m in 2026, implying a small 6.9% decline in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 22% to US$0.85 per share. However, before this estimates update, the consensus had been expecting revenues of US$26m and US$1.02 per share in losses. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Foghorn Therapeutics' past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 13% annualised revenue decline to the end of 2026. That is a notable change from historical growth of 28% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 23% annually for the foreseeable future. It's pretty clear that Foghorn Therapeutics' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around Foghorn Therapeutics' prospects. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. With a serious upgrade to expectations, it might be time to take another look at Foghorn Therapeutics.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Foghorn Therapeutics going out to 2028, and you can see them free on our platform here..

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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.