Downgrade: Here's How Analysts See Ikena Oncology, Inc. (NASDAQ:IKNA) Performing In The Near Term
The latest analyst coverage could presage a bad day for Ikena Oncology, Inc. (NASDAQ:IKNA), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
Following the latest downgrade, the current consensus, from the five analysts covering Ikena Oncology, is for revenues of US$18m in 2023, which would reflect a noticeable 4.5% reduction in Ikena Oncology's sales over the past 12 months. Losses are supposed to balloon 32% to US$1.65 per share. However, before this estimates update, the consensus had been expecting revenues of US$29m and US$1.50 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.
View our latest analysis for Ikena Oncology
There was no major change to the consensus price target of US$17.33, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Ikena Oncology's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 8.8% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 26% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 7.4% annually for the foreseeable future. It's pretty clear that Ikena Oncology's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Ikena Oncology's revenues are expected to grow slower than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Ikena Oncology.
After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Ikena Oncology's business, like dilutive stock issuance over the past year. For more information, you can click here to discover this and the 3 other warning signs we've identified.
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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.
