Newsflash: Alpha Teknova, Inc. (NASDAQ:TKNO) Analysts Have Been Trimming Their Revenue Forecasts
Market forces rained on the parade of Alpha Teknova, Inc. (NASDAQ:TKNO) shareholders today, when the analysts downgraded their forecasts for this year. 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 Alpha Teknova's five analysts is for revenues of US$38m in 2023, which would reflect a noticeable 3.3% decline in sales compared to the last year of performance. The loss per share is anticipated to greatly reduce in the near future, narrowing 38% to US$1.14. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$43m and losses of US$1.10 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.
View our latest analysis for Alpha Teknova
The consensus price target fell 24% to US$5.33, implicitly signalling that lower earnings per share are a leading indicator for Alpha Teknova's valuation.
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. We would also point out that the forecast 6.4% annualised revenue decline to the end of 2023 is roughly in line with the historical trend, which saw revenues shrink 7.3% annually over the past year By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 6.4% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Alpha Teknova to suffer worse than the wider industry.
The Bottom Line
The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Alpha Teknova. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Alpha Teknova's revenues are expected to grow slower 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 this year's forecasts, we'd be feeling a little more wary of Alpha Teknova going forwards.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Alpha Teknova analysts - going out to 2025, and you can see them free on our platform here.
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.
