Cue Biopharma, Inc. (NASDAQ:CUE) Analysts Just Slashed This Year's Estimates
The latest analyst coverage could presage a bad day for Cue Biopharma, Inc. (NASDAQ:CUE), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.
Following the latest downgrade, the current consensus, from the four analysts covering Cue Biopharma, is for revenues of US$7.1m in 2022, which would reflect a disturbing 40% reduction in Cue Biopharma's sales over the past 12 months. Losses are expected to increase slightly, to US$1.51 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$14m and losses of US$1.29 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 expecting losses per share to increase.
View our latest analysis for Cue Biopharma
The consensus price target fell 20% to US$16.25, implicitly signalling that lower earnings per share are a leading indicator for Cue Biopharma's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Cue Biopharma analyst has a price target of US$30.00 per share, while the most pessimistic values it at US$10.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
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. We would highlight that sales are expected to reverse, with a forecast 63% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 62% 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 16% annually for the foreseeable future. It's pretty clear that Cue Biopharma's revenues are expected to perform substantially worse than 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 Cue Biopharma. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Cue Biopharma.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Cue Biopharma analysts - going out to 2024, and you can see them 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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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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