- Oops!Something went wrong.Please try again later.
Today is shaping up negative for Cytokinetics, Incorporated (NASDAQ:CYTK) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. 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 current consensus, from the eight analysts covering Cytokinetics, is for revenues of US$26m in 2021, which would reflect a disturbing 56% reduction in Cytokinetics' sales over the past 12 months. Losses are supposed to balloon 33% to US$2.66 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$29m and losses of US$2.57 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 expecting losses per share to increase.
The consensus price target was broadly unchanged at US$32.64, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Cytokinetics analyst has a price target of US$50.00 per share, while the most pessimistic values it at US$21.00. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Cytokinetics' past performance and to peers in the same industry. Over the past five years, revenues have declined around 13% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 66% decline in revenue until the end of 2021. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 14% per year. So while a broad number of companies are forecast to grow, unfortunately Cytokinetics is expected to see its sales affected worse than other companies in the 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 Cytokinetics after today.
There might be good reason for analyst bearishness towards Cytokinetics, like dilutive stock issuance over the past year. Learn more, and discover the 2 other warning signs we've identified, for 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.