Analysts Just Made A Huge Upgrade To Their Sangamo Therapeutics, Inc. (NASDAQ:SGMO) Forecasts
Celebrations may be in order for Sangamo Therapeutics, Inc. (NASDAQ:SGMO) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.
After the upgrade, the nine analysts covering Sangamo Therapeutics are now predicting revenues of US$153m in 2023. If met, this would reflect a major 38% improvement in sales compared to the last 12 months. Losses are forecast to hold steady at around US$1.14. However, before this estimates update, the consensus had been expecting revenues of US$98m and US$1.33 per share in losses. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to this year's revenue estimates, while at the same time reducing their loss estimates.
Check out our latest analysis for Sangamo Therapeutics
The consensus price target fell 22%, to US$8.38, suggesting that the analysts remain pessimistic on the company, despite the improved earnings and revenue outlook. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Sangamo Therapeutics, with the most bullish analyst valuing it at US$16.00 and the most bearish at US$1.50 per share. We would probably assign less value to the forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Sangamo Therapeutics' growth to accelerate, with the forecast 38% annualised growth to the end of 2023 ranking favourably alongside historical growth of 15% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 15% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Sangamo Therapeutics to grow faster than the wider industry.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Sangamo Therapeutics is moving incrementally towards profitability. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. A lower price target is not intuitively what we would expect from a company whose business prospects are improving - at least judging by these forecasts - but if the underlying fundamentals are strong, Sangamo Therapeutics could be one for the watch list.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Sangamo 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 upgrading 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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