22nd Century Group, Inc. (NASDAQ:XXII) Analysts Just Slashed This Year's Revenue Estimates By 11%
The latest analyst coverage could presage a bad day for 22nd Century Group, Inc. (NASDAQ:XXII), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.
Following the downgrade, the current consensus from 22nd Century Group's four analysts is for revenues of US$94m in 2023 which - if met - would reflect a solid 12% increase on its sales over the past 12 months. Losses are expected to increase substantially, hitting US$4.36 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$106m and losses of US$4.20 per share in 2023. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.
See our latest analysis for 22nd Century Group
The consensus price target fell 27% to US$31.19, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We can infer from the latest estimates that forecasts expect a continuation of 22nd Century Group'shistorical trends, as the 26% annualised revenue growth to the end of 2023 is roughly in line with the 24% annual revenue growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 4.3% annually. So it's pretty clear that 22nd Century Group is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for this year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of 22nd Century Group's future valuation. Given the stark change in sentiment, we'd understand if investors became more cautious on 22nd Century Group after today.
So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with 22nd Century Group, including a short cash runway. Learn more, and discover the 3 other risks we've identified, for free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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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.
