- Oops!Something went wrong.Please try again later.
Market forces rained on the parade of Chimerix, Inc. (NASDAQ:CMRX) shareholders today, when the analysts downgraded their forecasts for next year. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. Surprisingly the share price has been buoyant, rising 16% to US$3.09 in the past 7 days. It will be interesting to see if the downgrade has an impact on buying demand for the company's shares.
Following the downgrade, the latest consensus from Chimerix's dual analysts is for revenues of US$17m in 2021, which would reflect a substantial 45% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 58% to US$0.67. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$20m and losses of US$0.62 per share in 2021. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Chimerix's rate of growth is expected to accelerate meaningfully, with the forecast 45% revenue growth noticeably faster than its historical growth of 6.9% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 20% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Chimerix is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for next year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of Chimerix going forwards.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Chimerix going out as far as 2024, 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email email@example.com.