Yahoo Finance Analysts Just Slashed Their Apollo Endosurgery, Inc. (NASDAQ:APEN) EPS Numbers By 15%
One thing we could say about the analysts on Apollo Endosurgery, Inc. (NASDAQ:APEN) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon. At US$2.11, shares are up 9.9% in the past 7 days. It will be interesting to see if this downgrade motivates investors to start selling their holdings.
Following the downgrade, the consensus from dual analysts covering Apollo Endosurgery is for revenues of US$41m in 2020, implying a concerning 20% decline in sales compared to the last 12 months. Losses are expected to increase substantially, hitting US$1.45 per share. However, before this estimates update, the consensus had been expecting revenues of US$54m and US$1.26 per share in losses. 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.
See our latest analysis for Apollo Endosurgery
The consensus price target fell 18% to US$6.75, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Apollo Endosurgery, with the most bullish analyst valuing it at US$9.00 and the most bearish at US$4.50 per share. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.
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. One more thing stood out to us about these estimates, and it's the idea that Apollo Endosurgery'sdecline is expected to accelerate, with revenues forecast to fall 20% next year, topping off a historical decline of 4.9% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 7.5% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Apollo Endosurgery to suffer 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 this year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.
So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Apollo Endosurgery, including a short cash runway. Learn more, and discover the 3 other flags 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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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