Analysts

medicine

The Editas Medicine, Inc. (NASDAQ:EDIT) Analysts Have Been Trimming Their Sales Forecasts

Market forces rained on the parade of Editas Medicine, Inc. (NASDAQ:EDIT) shareholders today, when the analysts downgraded their forecasts for next year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative. At US$30.41, shares are up 7.4% in the past 7 days. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

Following the latest downgrade, the current consensus, from the nine analysts covering Editas Medicine, is for revenues of US$19m in 2021, which would reflect a disturbing 79% reduction in Editas Medicine’s sales over the past 12 months. Losses are supposed to balloon 113% to US$3.47 per share. However, before this estimates update, the consensus had been expecting revenues of US$24m and US$3.39 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.

earnings-and-revenue-growthNasdaqGS:EDIT Earnings and Revenue Growth November 10th 2020

The consensus price target fell 8.7% to US$38.11, implicitly signalling that lower earnings per share are a leading indicator for Editas Medicine’s valuation. That’s not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Editas Medicine at US$60.00 per share, while the most bearish prices it at US$14.00. So we wouldn’t be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. With this in mind, we wouldn’t rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast revenue decline of 79%, a significant reduction from annual growth of 50% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 21% next year. It’s pretty clear that Editas Medicine’s revenues are expected to perform substantially worse than 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. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Editas Medicine’s future valuation. Given the stark change in sentiment, we’d understand if investors became more cautious on Editas Medicine

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medicine

Editas Medicine, Inc. Beat Analyst Profit Forecasts, And Analysts Have New Estimates

Editas Medicine, Inc. (NASDAQ:EDIT) came out with its quarterly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. In addition to smashing expectations with revenues of US$63m, Editas Medicine delivered a surprise statutory profit of US$0.12 per share, a notable improvement compared to analyst expectations of a loss. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. Readers will be glad to know we’ve aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Editas Medicine after the latest results.

Check out our latest analysis for Editas Medicine

earnings-and-revenue-growth
earnings-and-revenue-growth

Following the recent earnings report, the consensus from seven analysts covering Editas Medicine is for revenues of US$22.2m in 2021, implying a concerning 32% decline in sales compared to the last 12 months. Per-share losses are expected to explode, reaching US$3.29 per share. Before this latest report, the consensus had been expecting revenues of US$23.8m and US$3.39 per share in losses. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrade to loss per share forecasts for next year.

The consensus price target fell 8.7% to US$38.11, with the dip in revenue estimates clearly souring sentiment, despite the forecast reduction in losses. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Editas Medicine at US$60.00 per share, while the most bearish prices it at US$14.00. So we wouldn’t be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

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. These estimates imply that sales are expected to slow, with a forecast revenue decline of 32%, a significant reduction from annual growth of 42% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 20% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining – Editas Medicine is expected to lag the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Unfortunately,

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medicine

Editas Medicine, Inc. Just Reported A Surprise Profit And Analysts Updated Their Estimates

Editas Medicine, Inc. (NASDAQ:EDIT) came out with its third-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues beat expectations by 889%, and sales of US$63m were sufficient to generate a statutory profit of US$0.12 – a pleasant surprise given that the analysts were forecasting a loss! Earnings are an important time for investors, as they can track a company’s performance, look at what the analysts are forecasting for next year, and see if there’s been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year. earnings-and-revenue-growthNasdaqGS:EDIT Earnings and Revenue Growth November 7th 2020

Taking into account the latest results, the seven analysts covering Editas Medicine provided consensus estimates of US$22.2m revenue in 2021, which would reflect a painful 32% decline on its sales over the past 12 months. Losses are forecast to balloon 32% to US$3.29 per share. Before this earnings announcement, the analysts had been modelling revenues of US$23.8m and losses of US$3.39 per share in 2021. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrade to loss per share forecasts for next year.

The consensus price target fell 8.7% to US$38.11, with the dip in revenue estimates clearly souring sentiment, despite the forecast reduction in losses. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company’s valuation. The most optimistic Editas Medicine analyst has a price target of US$60.00 per share, while the most pessimistic values it at US$14.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that sales are expected to reverse, with the forecast 32% revenue decline a notable change from historical growth of 42% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 20% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining – Editas Medicine is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Unfortunately, they

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