One Idorsia Ltd (VTX:IDIA) Analyst Has Been Cutting Their Forecasts

The latest analyst coverage could presage a bad day for Idorsia Ltd (VTX:IDIA), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

After this downgrade, Idorsia's solo analyst is now forecasting revenues of CHF134m in 2025. This would be a major 81% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 30% to CHF1.10. Yet prior to the latest estimates, the analyst had been forecasting revenues of CHF199m and losses of CHF1.06 per share in 2025. Ergo, there's been a clear change in sentiment, with the analyst administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

See 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 60% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 27% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 21% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Idorsia is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analyst increased their loss per share estimates for next year. Unfortunately, the analyst also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Idorsia after today.

There might be good reason for analyst bearishness towards Idorsia, like a short cash runway. For more information, you can click here to discover this and the 2 other flags we've identified.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.