What You Need To Know About The Sangamo Therapeutics, Inc. (NASDAQ:SGMO) Analyst Downgrade Today
One thing we could say about the analysts on Sangamo Therapeutics, Inc. (NASDAQ:SGMO) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. 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 consensus from eight analysts covering Sangamo Therapeutics is for revenues of US$37m in 2024, implying a concerning 79% decline in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 61% to US$0.50 per share. However, before this estimates update, the consensus had been expecting revenues of US$43m and US$0.48 per share in losses. 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 Sangamo Therapeutics
Analysts lifted their price target 11% to US$3.50, implicitly signalling that lower earnings per share are not expected to have a longer-term impact on the stock's value.
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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 79% by the end of 2024. This indicates a significant reduction from annual growth of 17% 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 17% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Sangamo Therapeutics is expected to lag 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 Sangamo Therapeutics' revenues are expected to grow slower than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Given the stark change in sentiment, we'd understand if investors became more cautious on Sangamo Therapeutics after today.
As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Sangamo Therapeutics' financials, such as dilutive stock issuance over the past year. Learn more, and discover the 2 other risks we've identified, for free on our platform here.
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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.
