What You Need To Know About The Danimer Scientific, Inc. (NYSE:DNMR) Analyst Downgrade Today
The analysts covering Danimer Scientific, Inc. (NYSE:DNMR) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory 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 Danimer Scientific from its five analysts is for revenues of US$114m in 2024 which, if met, would be a major 124% increase on its sales over the past 12 months. Losses are forecast to hold steady at around US$1.42 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$151m and losses of US$1.34 per share in 2024. 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.
See our latest analysis for Danimer Scientific
The consensus price target fell 27% to US$3.20, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Danimer Scientific's growth to accelerate, with the forecast 90% annualised growth to the end of 2024 ranking favourably alongside historical growth of 11% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.2% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Danimer Scientific is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for next year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of Danimer Scientific going forwards.
There might be good reason for analyst bearishness towards Danimer Scientific, like a short cash runway. 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.
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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.
