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One thing we could say about the analysts on 4D Molecular Therapeutics, Inc. (NASDAQ:FDMT) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
After the downgrade, the consensus from 4D Molecular Therapeutics' three analysts is for revenues of US$5.1m in 2021, which would reflect a sizeable 58% decline in sales compared to the last year of performance. The loss per share is anticipated to greatly reduce in the near future, narrowing 46% to US$2.75. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$5.7m and losses of US$2.72 per share in 2021. 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 making no real change to the loss per share numbers.
There was no real change to the consensus price target of US$52.33, suggesting that the revisions to revenue estimates are not expected to have a long-term impact on 4D Molecular Therapeutics' valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic 4D Molecular Therapeutics analyst has a price target of US$70.00 per share, while the most pessimistic values it at US$40.00. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 69% by the end of 2021. This indicates a significant reduction from annual growth of 45% over the last year. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 14% per year. It's pretty clear that 4D Molecular Therapeutics' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on 4D Molecular Therapeutics after today.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple 4D Molecular Therapeutics analysts - going out to 2025, 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.
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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