Editas Medicine, Inc. (NASDAQ:EDIT) Analysts Just Slashed Next Year's Revenue Estimates By 31%
Market forces rained on the parade of Editas Medicine, Inc. (NASDAQ:EDIT) shareholders today, when the analysts downgraded their forecasts for next year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
Following the latest downgrade, the current consensus, from the nine analysts covering Editas Medicine, is for revenues of US$19m in 2021, which would reflect a concerning 79% reduction in Editas Medicine's sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$28m in 2021. The consensus view seems to have become more pessimistic on Editas Medicine, noting the sizeable cut to revenue estimates in this update.
Check out our latest analysis for Editas Medicine
There was no particular change to the consensus price target of US$44.38, with Editas Medicine's latest outlook seemingly not enough to result in a change of valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Editas Medicine, with the most bullish analyst valuing it at US$86.00 and the most bearish at US$14.00 per share. We would probably assign less value to the forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that sales are expected to reverse, with the forecast 79% revenue decline a notable change from historical growth of 50% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 20% next year. It's pretty clear that Editas Medicine's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The clear low-light was that analysts slashing their revenue forecasts for Editas Medicine next year. They're also anticipating slower revenue growth than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Editas Medicine after today.
Want to learn more? At least one of Editas Medicine's nine analysts has provided estimates out to 2025, which can be seen for 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.
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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