Fate Therapeutics, Inc. (NASDAQ:FATE) investors will be delighted, with the company turning in some strong numbers with its latest results. Overall results were decent, with revenues of US$3.1m beating estimates by113%. Statutory losses were subsequently less thanthe analysts had expected, at US$0.40 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Fate Therapeutics after the latest results.

Check out our latest analysis for Fate Therapeutics

Taking into account the latest results, the twelve analysts covering Fate Therapeutics provided consensus estimates of US$4.21m revenue in 2025, which would reflect a stressful 69% decline over the past 12 months. Losses are expected to increase slightly, to US$1.71 per share. Before this earnings announcement, the analysts had been modelling revenues of US$3.88m and losses of US$1.66 per share in 2025. So it's pretty clear consensus is mixed on Fate Therapeutics after the new consensus numbers; while the analysts lifted revenue numbers, they also administered a moderate increase in per-share loss expectations.

There was no major change to the consensus price target of US$6.38, with growing revenues seemingly enough to offset the concern of growing losses. 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. There are some variant perceptions on Fate Therapeutics, with the most bullish analyst valuing it at US$12.00 and the most bearish at US$3.50 per share. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 61% annualised decline to the end of 2025. That is a notable change from historical growth of 20% 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. It's pretty clear that Fate Therapeutics' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Fate Therapeutics. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. The consensus price target held steady at US$6.38, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Fate Therapeutics going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 4 warning signs for Fate Therapeutics (1 is concerning!) that we have uncovered.

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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.