These Analysts Think Clearside Biomedical, Inc.'s (NASDAQ:CLSD) Sales Are Under Threat
The analysts covering Clearside Biomedical, Inc. (NASDAQ:CLSD) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. Shares are up 8.0% to US$1.62 in the past week. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.
Following the latest downgrade, the four analysts covering Clearside Biomedical provided consensus estimates of US$778k revenue in 2022, which would reflect a concerning 97% decline on its sales over the past 12 months. After this downgrade, the company is anticipated to report a loss of US$0.54 in 2022, a sharp decline from a profit over the last year. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$1.3m and losses of US$0.53 per share in 2022. 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.
View our latest analysis for Clearside Biomedical
The consensus price target fell 17% to US$7.50, with the analysts clearly concerned about the weaker revenue outlook and expectation of ongoing losses. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Clearside Biomedical analyst has a price target of US$10.00 per share, while the most pessimistic values it at US$7.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Clearside Biomedical shareholders.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that sales are expected to reverse, with a forecast 100% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 79% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.5% per year. It's pretty clear that Clearside Biomedical's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Clearside Biomedical's revenues are expected to grow slower than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Clearside Biomedical's future valuation. Given the stark change in sentiment, we'd understand if investors became more cautious on Clearside Biomedical after today.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Clearside Biomedical analysts - going out to 2024, 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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