Analyst Forecasts Just Became More Bearish On Mirati Therapeutics, Inc. (NASDAQ:MRTX)
One thing we could say about the analysts on Mirati Therapeutics, Inc. (NASDAQ:MRTX) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.
After this downgrade, Mirati Therapeutics' 16 analysts are now forecasting revenues of US$53m in 2023. This would be a huge 330% improvement in sales compared to the last 12 months. Per-share losses are expected to creep up to US$13.78. Yet before this consensus update, the analysts had been forecasting revenues of US$74m and losses of US$13.68 per share in 2023. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also making no real change to the loss per share numbers.
Check out our latest analysis for Mirati Therapeutics
The consensus price target was broadly unchanged at US$70.73, implying that the business is performing roughly in line with expectations, despite a downwards adjustment to forecast sales this year. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Mirati Therapeutics at US$115 per share, while the most bearish prices it at US$50.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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. The analysts are definitely expecting Mirati Therapeutics' growth to accelerate, with the forecast 3x annualised growth to the end of 2023 ranking favourably alongside historical growth of 48% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Mirati Therapeutics is expected to grow much faster than its industry.
The Bottom Line
Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Mirati Therapeutics after today.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Mirati Therapeutics going out to 2025, 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.
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