Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT) Analysts Just Cut Their EPS Forecasts Substantially
The analysts covering Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
Following the latest downgrade, the nine analysts covering Arcturus Therapeutics Holdings provided consensus estimates of US$148m revenue in 2023, which would reflect a sizeable 48% decline on its sales over the past 12 months. Following this this downgrade, earnings are now expected to tip over into loss-making territory, with the analysts forecasting losses of US$1.36 per share in 2023. However, before this estimates update, the consensus had been expecting revenues of US$175m and US$0.54 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.
See our latest analysis for Arcturus Therapeutics Holdings
The consensus price target lifted 24% to US$60.44, clearly signalling that the weaker revenue and EPS outlook are not expected to weigh on the stock over the longer term.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Arcturus Therapeutics Holdings' past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 72% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 63% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 15% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Arcturus Therapeutics Holdings is expected to lag the wider industry.
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 Arcturus Therapeutics Holdings. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. The rising price target is a puzzle, but still - with a serious cut to this year's outlook, we wouldn't be surprised if investors were a bit wary of Arcturus Therapeutics Holdings.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Arcturus Therapeutics Holdings 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 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.
