Analysts Have Lowered Expectations For Metagenomi Therapeutics, Inc. (NASDAQ:MGX) After Its Latest Results

It's shaping up to be a tough period for Metagenomi Therapeutics, Inc. (NASDAQ:MGX), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. It was not a great result overall, as revenues of US$1.2m fell 79% short of analyst expectations. Unsurprisingly, statutory losses ended up being10% larger than the analysts expected, at US$0.61 per share. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Following the recent earnings report, the consensus from five analysts covering Metagenomi Therapeutics is for revenues of US$10.6m in 2026. This implies a stressful 53% decline in revenue compared to the last 12 months. The loss per share is expected to ameliorate slightly, reducing to US$2.15. Before this latest report, the consensus had been expecting revenues of US$22.2m and US$2.12 per share in losses. So there's definitely been a change in sentiment in this update, with the analysts administering a substantial haircut to next year's revenue estimates, while at the same time holding losses per share steady.

Check out our latest analysis for Metagenomi Therapeutics

The analysts have cut their price target 6.7% to US$9.33per share, signalling that the declining revenue and ongoing losses are contributing to the lower 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 Metagenomi Therapeutics analyst has a price target of US$12.00 per share, while the most pessimistic values it at US$7.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Of course, another way to look at these forecasts is to place them into context against the industry itself. Over the past three years, revenues have declined around 5.4% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 63% decline in revenue until the end of 2026. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 22% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Metagenomi Therapeutics to suffer 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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Metagenomi Therapeutics' future valuation.

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 Metagenomi Therapeutics analysts - going out to 2028, and you can see them free on our platform here.

It is also worth noting that we have found 3 warning signs for Metagenomi Therapeutics (1 is concerning!) that you need to take into consideration.

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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.