Yahoo Finance Idorsia Ltd (VTX:IDIA) Analysts Just Cut Their EPS Forecasts Substantially
Today is shaping up negative for Idorsia Ltd (VTX:IDIA) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.
Following the downgrade, the most recent consensus for Idorsia from its eight analysts is for revenues of CHF226m in 2024 which, if met, would be a substantial 23% increase on its sales over the past 12 months. Losses are presumed to reduce, shrinking 17% per share from last year to CHF1.74. Yet before this consensus update, the analysts had been forecasting revenues of CHF272m and losses of CHF1.43 per share in 2024. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.
View our latest analysis for Idorsia
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. It's clear from the latest estimates that Idorsia's rate of growth is expected to accelerate meaningfully, with the forecast 18% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 6.2% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 18% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Idorsia is expected to grow at about the same rate as 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. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on Idorsia, and a few readers might choose to steer clear of the stock.
As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Idorsia's financials, such as a short cash runway. Learn more, and discover the 1 other flag we've identified, 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.
