Agios Pharmaceuticals, Inc. (NASDAQ:AGIO) Analysts Just Slashed This Year's Estimates
One thing we could say about the analysts on Agios Pharmaceuticals, Inc. (NASDAQ:AGIO) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business. Shares are up 5.4% to US$26.51 in the past week. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.
After the downgrade, the nine analysts covering Agios Pharmaceuticals are now predicting revenues of US$43m in 2024. If met, this would reflect a sizeable 79% improvement in sales compared to the last 12 months. Per-share losses are expected to explode, reaching US$5.80 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$71m and losses of US$5.20 per share in 2024. 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.
View our latest analysis for Agios Pharmaceuticals
There was no major change to the consensus price target of US$40.83, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Agios Pharmaceuticals is forecast to grow faster in the future than it has in the past, with revenues expected to display 79% annualised growth until the end of 2024. If achieved, this would be a much better result than the 53% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 17% annually. Not only are Agios Pharmaceuticals' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Agios Pharmaceuticals. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Agios Pharmaceuticals after the downgrade.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Agios Pharmaceuticals going out to 2026, and you can see them 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.
