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It's shaping up to be a tough period for Arcadia Biosciences, Inc. (NASDAQ:RKDA), which a week ago released some disappointing annual results that could have a notable impact on how the market views the stock. Revenues came in at US$1.2m, missing analyst expectations by 13%. Statutory losses per share fell slightly short, coming in at US$4.53, 5.3% below what the analysts had predicted. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the consensus forecast from Arcadia Biosciences's twin analysts is for revenues of US$9.70m in 2020, which would reflect a sizeable 730% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 49% to US$2.32. Before this latest report, the consensus had been expecting revenues of US$9.90m and US$1.91 per share in losses. So it's pretty clear the analysts have mixed opinions on Arcadia Biosciences after this update; revenues were downgraded and per-share losses expected to increase.
The analysts lifted their price target 15% to US$15.00, implicitly signalling that lower earnings per share are not expected to have a longer-term impact on the stock's value.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that Arcadia Biosciences's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow manyfold, well above its historical decline of 33% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 2.4% per year. So it looks like Arcadia Biosciences is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Arcadia Biosciences. They also downgraded their revenue estimates, although industry data suggests that Arcadia Biosciences's revenues are expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2021, which can be seen for free on our platform here.
It is also worth noting that we have found 5 warning signs for Arcadia Biosciences (1 is a bit unpleasant!) that you need to take into consideration.
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