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Today is shaping up negative for Mirati Therapeutics, Inc. (NASDAQ:MRTX) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.
Following the latest downgrade, the eleven analysts covering Mirati Therapeutics provided consensus estimates of US$3.5m revenue in 2021, which would reflect a stressful 74% decline on its sales over the past 12 months. Per-share losses are expected to creep up to US$8.68. Yet before this consensus update, the analysts had been forecasting revenues of US$5.8m and losses of US$8.67 per share in 2021. So there's definitely been a change in sentiment in this update, with the analysts administering a substantial haircut to this year's revenue estimates, while at the same time holding losses per share steady.
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. One more thing stood out to us about these estimates, and it's the idea that Mirati Therapeutics' decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 74% to the end of 2021. This tops off a historical decline of 7.7% a year over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 18% per year. So while a broad number of companies are forecast to grow, unfortunately Mirati Therapeutics is expected to see its sales affected worse than other companies in the industry.
The Bottom Line
Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Mirati Therapeutics' revenues are expected to grow slower than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Mirati Therapeutics after today.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Mirati Therapeutics analysts - going out to 2025, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
This article by Simply Wall St is general in nature. 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.
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