Yahoo Finance Analysts Just Slashed Their Microbix Biosystems Inc. (TSE:MBX) EPS Numbers
The analysts covering Microbix Biosystems Inc. (TSE:MBX) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.
Following the downgrade, the current consensus from Microbix Biosystems' twin analysts is for revenues of CA$23m in 2023 which - if met - would reflect a decent 18% increase on its sales over the past 12 months. Per-share earnings are expected to surge 75% to CA$0.022. Before this latest update, the analysts had been forecasting revenues of CA$29m and earnings per share (EPS) of CA$0.044 in 2023. Indeed, we can see that the analysts are a lot more bearish about Microbix Biosystems' prospects, administering a sizeable cut to revenue estimates and slashing their EPS estimates to boot.
View our latest analysis for Microbix Biosystems
It'll come as no surprise then, to learn that the analysts have cut their price target 20% to CA$0.90. 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 Microbix Biosystems at CA$1.00 per share, while the most bearish prices it at CA$0.80. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Microbix Biosystems is an easy business to forecast or the underlying assumptions are obvious.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Microbix Biosystems' growth to accelerate, with the forecast 18% annualised growth to the end of 2023 ranking favourably alongside historical growth of 13% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 71% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Microbix Biosystems is expected to grow slower than the wider industry.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Microbix Biosystems. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Microbix Biosystems' revenues are expected to grow 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2024, which can be seen 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.
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