Zai Lab Limited (NASDAQ:ZLAB) just released its quarterly report and things are looking bullish. Results overall were solid, with revenues arriving 2.4% better than analyst forecasts at US$106m. Higher revenues also resulted in substantially lower statutory losses which, at US$0.46 per share, were 2.4% 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Zai Lab after the latest results.

Taking into account the latest results, the 16 analysts covering Zai Lab provided consensus estimates of US$422.9m revenue in 2026, which would reflect a small 5.9% decline over the past 12 months. Losses are forecast to balloon 35% to US$2.26 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$447.6m and losses of US$2.24 per share in 2026.

The consensus price target was broadly unchanged at US$32.18, implying that the business is performing roughly in line with expectations, despite a downwards adjustment to forecast revenue next year. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Zai Lab at US$50.00 per share, while the most bearish prices it at US$24.25. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Zai Lab's past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 12% annualised decline to the end of 2026. That is a notable change from historical 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 23% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Zai Lab is expected to lag 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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Zai Lab analysts - 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 1 warning sign with Zai Lab , and understanding this 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.