The Idorsia Ltd (VTX:IDIA) Analysts Have Been Trimming Their Sales Forecasts

One thing we could say about the analysts on Idorsia Ltd (VTX:IDIA) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the latest downgrade, the ten analysts covering Idorsia provided consensus estimates of CHF114m revenue in 2023, which would reflect a definite 9.7% decline on its sales over the past 12 months. Losses are presumed to reduce, shrinking 13% per share from last year to CHF3.97. Yet before this consensus update, the analysts had been forecasting revenues of CHF144m and losses of CHF3.97 per share in 2023. So there's definitely been a change in sentiment in this update, with the analysts administering a substantial haircut to this year's revenue estimates, while at the same time holding losses per share steady.

Check out our latest analysis for Idorsia

the analysts have cut their price target 6.3% to CHF9.60 per share, signalling that the declining revenue and ongoing losses are contributing to the lower valuation. 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 Idorsia, with the most bullish analyst valuing it at CHF30.00 and the most bearish at CHF5.50 per share. With such a wide range in price targets, the analysts are almost certainly betting on widely diverse outcomes for the underlying business. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

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. Over the past five years, revenues have declined around 12% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 18% decline in revenue until the end of 2023. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 21% per year. So while a broad number of companies are forecast to grow, unfortunately Idorsia is expected to see its sales affected worse than other companies in the industry.

The Bottom Line

Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Idorsia's revenues are expected to grow slower than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Given the stark change in sentiment, we'd understand if investors became more cautious on Idorsia after today.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Idorsia, including a short cash runway. For more information, you can click here to discover this and the 1 other warning sign we've identified.

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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.