It's been a sad week for Zai Lab Limited (NASDAQ:ZLAB), who've watched their investment drop 12% to US$18.60 in the week since the company reported its first-quarter result. The results weren't stellar - revenue fell 8.1% short of analyst estimates at US$100m, although statutory losses were a relative bright spot. The per-share loss was US$0.46, 19% smaller than the analysts were expecting prior to the result. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Following last week's earnings report, Zai Lab's 16 analysts are forecasting 2026 revenues to be US$459.3m, approximately in line with the last 12 months. Losses are forecast to balloon 37% to US$2.17 per share. Before this latest report, the consensus had been expecting revenues of US$490.3m and US$2.02 per share in losses. So it's pretty clear consensus is more negative on Zai Lab after the new consensus numbers; while the analysts trimmed their revenue estimates, they also administered a moderate increase in per-share loss expectations.

The average price target was broadly unchanged at US$34.39, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Zai Lab analyst has a price target of US$52.00 per share, while the most pessimistic values it at US$21.60. 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.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Zai Lab's revenue growth is expected to slow, with the forecast 1.8% annualised growth rate until the end of 2026 being well below the historical 29% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 22% per year. Factoring in the forecast slowdown in growth, it seems obvious that Zai Lab is also expected to grow slower than other industry participants.

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. The consensus price target held steady at US$34.39, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Zai Lab going out to 2028, and you can see them free on our platform here..

Even so, be aware that Zai Lab is showing 1 warning sign in our investment analysis , 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.