The analysts covering Geron Corporation (NASDAQ:GERN) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for next year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.
Following the latest downgrade, the five analysts covering Geron provided consensus estimates of US$183k revenue in 2021, which would reflect a sizeable 54% decline on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$200k in 2021. The forecasts seem less optimistic overall, with the slight decrease in revenue estimates in the latest consensus update.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would also point out that the forecast 54% revenue decline is better than the historical trend, which saw revenues shrink 70% annually over the past five years
The Bottom Line
The clear low-light was that analysts slashing their revenue forecasts for Geron next year. They also expect company revenue to perform worse than the wider market. 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 Geron after today.
So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Geron, including major dilution from new stock issuance in the past year. For more information, you can click here to discover this and the 1 other flag we've identified.
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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.
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