Some Analysts Just Cut Their Aptinyx Inc. (NASDAQ:APTX) Estimates
One thing we could say about the analysts on Aptinyx Inc. (NASDAQ:APTX) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. 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 latest downgrade, the current consensus, from the seven analysts covering Aptinyx, is for revenues of US$2.9m in 2020, which would reflect a considerable 20% reduction in Aptinyx's sales over the past 12 months. Losses are expected to be contained, narrowing 19% from last year to US$1.24. However, before this estimates update, the consensus had been expecting revenues of US$3.2m and US$1.19 per share in losses. 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 expecting losses per share to increase.
View our latest analysis for Aptinyx
The consensus price target was broadly unchanged at US$9.67, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. 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 Aptinyx at US$13.00 per share, while the most bearish prices it at US$7.00. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.
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. We would also point out that the forecast 20% revenue decline is better than the historical trend, which saw revenues shrink 28% annually over the past year
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for this year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Aptinyx going forwards.
There might be good reason for analyst bearishness towards Aptinyx, like dilutive stock issuance over the past year. Learn more, and discover the 4 other flags 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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