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MediWound Ltd. (NASDAQ:MDWD) Just Reported And Analysts Have Been Cutting Their Estimates

Last week, you might have seen that MediWound Ltd. (NASDAQ:MDWD) released its second-quarter result to the market. The early response was not positive, with shares down 3.8% to US$3.52 in the past week. The results were mixed overall, with revenues slightly ahead of analyst estimates at US$6.1m. Statutory losses by contrast were 7.5% larger than predictions at US$0.12 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on MediWound after the latest results.

Check out our latest analysis for MediWound

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Taking into account the latest results, the six analysts covering MediWound provided consensus estimates of US$23.0m revenue in 2021, which would reflect a definite 8.7% decline on its sales over the past 12 months. Losses are forecast to balloon 29% to US$0.46 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$24.9m and losses of US$0.33 per share in 2021. While this year's revenue estimates dropped there was also a regrettable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

There was no major change to the consensus price target of US$7.08, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic MediWound analyst has a price target of US$10.00 per share, while the most pessimistic values it at US$6.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await MediWound shareholders.

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 a forecast 17% annualised revenue decline to the end of 2021. That is a notable change from historical growth of 53% 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 3.6% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - MediWound is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$7.08, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for MediWound going out to 2023, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for MediWound that you should be aware of.

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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