SOPHiA GENETICS SA (NASDAQ:SOPH) shareholders are probably feeling a little disappointed, since its shares fell 5.0% to US$3.40 in the week after its latest quarterly results. Revenues came in at US$16m, in line with expectations, while statutory losses per share were substantially higher than expected, at US$0.28 per share. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for SOPHiA GENETICS

Following the latest results, SOPHiA GENETICS' five analysts are now forecasting revenues of US$78.9m in 2025. This would be a major 22% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 22% to US$0.84. Before this latest report, the consensus had been expecting revenues of US$79.4m and US$0.86 per share in losses. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrade to loss per share forecasts for next year.

Even with the lower forecast losses, the analysts lowered their valuations, with the average price target falling 25% to US$6.00. It looks likethe analysts have become less optimistic about the overall business. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic SOPHiA GENETICS analyst has a price target of US$7.00 per share, while the most pessimistic values it at US$5.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 18% growth on an annualised basis. That is in line with its 21% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 9.6% per year. So although SOPHiA GENETICS is expected to maintain its revenue growth rate, it's definitely expected to grow faster 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on SOPHiA GENETICS. Long-term earnings power is much more important than next year's profits. We have forecasts for SOPHiA GENETICS going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for SOPHiA GENETICS that you need to be mindful of.

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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.