What Does The Future Hold For MeiraGTx Holdings plc (NASDAQ:MGTX)? These Analysts Have Been Cutting Their Estimates
The latest analyst coverage could presage a bad day for MeiraGTx Holdings plc (NASDAQ:MGTX), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. At US$14.38, shares are up 8.6% in the past 7 days. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.
After the downgrade, the consensus from MeiraGTx Holdings' three analysts is for revenues of US$10m in 2020, which would reflect a substantial 40% decline in sales compared to the last year of performance. Per-share losses are expected to explode, reaching US$2.69 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$12m and losses of US$2.66 per share in 2020. So there's definitely been a change in sentiment in this update, with the analysts administering a substantial haircut to this year's revenue estimates, while at the same time holding losses per share steady.
View our latest analysis for MeiraGTx Holdings
The consensus price target was broadly unchanged at US$33.33, implying that the business is performing roughly in line with expectations, despite a downwards adjustment to forecast sales this year. 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. Currently, the most bullish analyst values MeiraGTx Holdings at US$45.00 per share, while the most bearish prices it at US$20.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the MeiraGTx Holdings' past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with the forecast 40% revenue decline a notable change from historical growth of 513% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 21% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - MeiraGTx Holdings is expected to lag the wider industry.
The Bottom Line
Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on MeiraGTx Holdings after today.
So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with MeiraGTx Holdings, including dilutive stock issuance over the past year. For more information, you can click here to discover this and the 2 other flags we've identified.
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.
This article by Simply Wall St is general in nature. 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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