Downgrade: Here's How Analysts See 2seventy bio, Inc. (NASDAQ:TSVT) Performing In The Near Term
One thing we could say about the analysts on 2seventy bio, Inc. (NASDAQ:TSVT) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business. Shares are up 4.2% to US$5.67 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 downgrade, the consensus from seven analysts covering 2seventy bio is for revenues of US$75m in 2024, implying a concerning 25% decline in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 45% to US$2.38 per share. However, before this estimates update, the consensus had been expecting revenues of US$109m and US$1.52 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.
Check out our latest analysis for 2seventy bio
The consensus price target fell 15% to US$9.33, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the 2seventy bio's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 25% by the end of 2024. This indicates a significant reduction from annual growth of 8.2% 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 18% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - 2seventy bio 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 2seventy bio. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that 2seventy bio's revenues are expected to grow slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for 2seventy bio going out to 2026, 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.
