Yahoo Finance Aadi Bioscience, Inc. (NASDAQ:AADI) Analysts Are Cutting Their Estimates: Here's What You Need To Know
Aadi Bioscience, Inc. (NASDAQ:AADI) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. Revenues came in at US$5.4m, missing analyst expectations by 15%. Statutory losses per share fell slightly short, coming in at US$0.68, 9.7% below what the analysts had predicted. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Aadi Bioscience
Following the recent earnings report, the consensus from four analysts covering Aadi Bioscience is for revenues of US$22.7m in 2024. This implies a small 4.8% decline in revenue compared to the last 12 months. Losses are forecast to narrow 9.9% to US$2.53 per share. Before this earnings announcement, the analysts had been modelling revenues of US$28.2m and losses of US$2.49 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue forecasts while also making no real change to the loss per share numbers.
The analysts have cut their price target 5.7% to US$11.00per share, signalling that the declining revenue and ongoing losses are contributing to the lower valuation. 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. Currently, the most bullish analyst values Aadi Bioscience at US$14.00 per share, while the most bearish prices it at US$5.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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 revenue is expected to slow, with a forecast annualised decline of 6.3% by the end of 2024. This indicates a significant reduction from annual growth of 36% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 19% per year. It's pretty clear that Aadi Bioscience's revenues are expected to perform substantially worse than 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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Aadi Bioscience going out to 2026, and you can see them free on our platform here.
Before you take the next step you should know about the 3 warning signs for Aadi Bioscience that we have uncovered.
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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.
