Revenue Downgrade: Here's What Analysts Forecast For Morphic Holding, Inc. (NASDAQ:MORF)
Today is shaping up negative for Morphic Holding, Inc. (NASDAQ:MORF) shareholders, with the analysts delivering a substantial negative revision to next 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. Surprisingly the share price has been buoyant, rising 13% to US$41.15 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 latest downgrade, the current consensus, from the eight analysts covering Morphic Holding, is for revenues of US$9.1m in 2023, which would reflect a sizeable 88% reduction in Morphic Holding's sales over the past 12 months. Per-share losses are expected to explode, reaching US$3.74 per share. However, before this estimates update, the consensus had been expecting revenues of US$12m and US$3.65 per share in losses. 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.
See our latest analysis for Morphic Holding
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Morphic Holding's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 81% by the end of 2023. This indicates a significant reduction from annual growth of 43% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 15% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Morphic Holding 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 next 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 Morphic Holding after today.
After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Morphic Holding's business, like dilutive stock issuance over the past year. For more information, you can click here to discover this and the 2 other risks we've identified.
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.
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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.
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