Shattuck Labs, Inc. (NASDAQ:STTK) Analysts Just Trimmed Their Revenue Forecasts By 45%
The latest analyst coverage could presage a bad day for Shattuck Labs, Inc. (NASDAQ:STTK), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic. Bidders are definitely seeing a different story, with the stock price of US$5.25 reflecting a 17% rise in the past week. 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 three analysts covering Shattuck Labs, is for revenues of US$1.4m in 2022, which would reflect a stressful 95% reduction in Shattuck Labs' sales over the past 12 months. Before the latest update, the analysts were foreseeing US$2.5m of revenue in 2022. The consensus view seems to have become more pessimistic on Shattuck Labs, noting the sizeable cut to revenue estimates in this update.
Check out our latest analysis for Shattuck Labs
The consensus price target fell 16% to US$39.00, with the analysts clearly less optimistic about Shattuck Labs' valuation following this update. 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. There are some variant perceptions on Shattuck Labs, with the most bullish analyst valuing it at US$47.00 and the most bearish at US$31.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Shattuck Labs shareholders.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Shattuck Labs' past performance and to peers in the same industry. One more thing stood out to us about these estimates, and it's the idea that Shattuck Labs' decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 95% to the end of 2022. This tops off a historical decline of 15% a year over the past three years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 11% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Shattuck Labs to suffer worse than the wider industry.
The Bottom Line
The clear low-light was that analysts slashing their revenue forecasts for Shattuck Labs this year. They're also anticipating slower revenue growth than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Shattuck Labs' future valuation. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Shattuck Labs after today.
Looking to learn more? At least one of Shattuck Labs' three analysts has provided estimates out to 2024, which can be seen 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.
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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.
