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Regulus Therapeutics Inc. (NASDAQ:RGLS) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.
After this upgrade, Regulus Therapeutics' three analysts are now forecasting revenues of US$5.0m in 2020. This would be a major improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 37% to US$0.65. However, before this estimates update, the consensus had been expecting revenues of US$5.1m and US$0.51 per share in losses. So it's pretty clear the analysts have mixed opinions on Regulus Therapeutics even after this update; although they reconfirmed their revenue numbers, it came at the cost of a per-share losses.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Regulus Therapeutics' past performance and to peers in the same industry. One thing stands out from these estimates, which is that Regulus Therapeutics is forecast to grow faster in the future than it has in the past, with revenues expected to grow manyfold. If achieved, this would be a much better result than the 41% annual decline over the past five years. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 24% next year. So it looks like Regulus Therapeutics is expected to grow faster than its competitors, at least for a while.
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 Regulus Therapeutics. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that Regulus Therapeutics' revenues are expected to perform better than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Regulus Therapeutics.
Analysts are clearly in love with Regulus Therapeutics at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as dilutive stock issuance over the past year. You can learn more, and discover the 4 other flags we've identified, for 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.
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