What You Need To Know About The Bicycle Therapeutics plc (NASDAQ:BCYC) Analyst Downgrade Today
Market forces rained on the parade of Bicycle Therapeutics plc (NASDAQ:BCYC) shareholders today, when the analysts downgraded their forecasts for next year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.
Following the downgrade, the most recent consensus for Bicycle Therapeutics from its 14 analysts is for revenues of US$17m in 2023 which, if met, would be a meaningful 13% increase on its sales over the past 12 months. Losses are supposed to balloon 29% to US$4.39 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$19m and losses of US$4.22 per share in 2023. 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.
Check out our latest analysis for Bicycle Therapeutics
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Bicycle Therapeutics' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Bicycle Therapeutics' revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 10% growth on an annualised basis. This is compared to a historical growth rate of 19% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 14% per year. Factoring in the forecast slowdown in growth, it seems obvious that Bicycle Therapeutics is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for next year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Bicycle Therapeutics' revenues are expected to grow slower 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 Bicycle Therapeutics after today.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Bicycle Therapeutics 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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