Market forces rained on the parade of Heat Biologics, Inc. (NASDAQ:HTBX) 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.
Following the latest downgrade, the four analysts covering Heat Biologics provided consensus estimates of US$1.8m revenue in 2020, which would reflect a stressful 46% decline on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 36% to US$0.34. Yet before this consensus update, the analysts had been forecasting revenues of US$2.0m and losses of US$0.31 per share in 2020. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Heat Biologics' past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast revenue decline of 46%, a significant reduction from annual growth of 42% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 25% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Heat Biologics 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. 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 Heat Biologics after today.
That said, the analysts might have good reason to be negative on Heat Biologics, given major dilution from new stock issuance in the past year. For more information, you can click here to discover this and the 4 other warning signs we've identified.
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