Things Look Grim For Eiger BioPharmaceuticals, Inc. (NASDAQ:EIGR) After Today's Downgrade
The analysts covering Eiger BioPharmaceuticals, Inc. (NASDAQ:EIGR) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon. Bidders are definitely seeing a different story, with the stock price of US$7.50 reflecting a 11% 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 downgrade, the most recent consensus for Eiger BioPharmaceuticals from its four analysts is for revenues of US$25m in 2022 which, if met, would be a sizeable 125% increase on its sales over the past 12 months. Losses are expected to increase substantially, hitting US$2.31 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$32m and losses of US$2.03 per share in 2022. 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.
View our latest analysis for Eiger BioPharmaceuticals
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Eiger BioPharmaceuticals' rate of growth is expected to accelerate meaningfully, with the forecast 195% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 93% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Eiger BioPharmaceuticals to grow faster than 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. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on Eiger BioPharmaceuticals, and a few readers might choose to steer clear of the stock.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Eiger BioPharmaceuticals going out to 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
