iSpecimen Inc. (NASDAQ:ISPC) Analysts Just Slashed This Year's Estimates

One thing we could say about the analysts on iSpecimen Inc. (NASDAQ:ISPC) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following this downgrade, iSpecimen's three analysts are forecasting 2022 revenues to be US$9.9m, approximately in line with the last 12 months. Losses are supposed to balloon 31% to US$1.27 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$11m and losses of US$1.13 per share in 2022. 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.

View our latest analysis for iSpecimen

The consensus price target fell 11% to US$9.83, implicitly signalling that lower earnings per share are a leading indicator for iSpecimen's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic iSpecimen analyst has a price target of US$14.00 per share, while the most pessimistic values it at US$5.50. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would also point out that the forecast 3.7% annualised revenue decline to the end of 2022 is better than the historical trend, which saw revenues shrink 6.6% annually over the past year By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 16% per year. So while a broad number of companies are forecast to grow, unfortunately iSpecimen is expected to see its sales affected worse than other companies in the industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that iSpecimen's revenues are expected to grow slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of iSpecimen.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with iSpecimen, including dilutive stock issuance over the past year. For more information, you can click here to discover this and the 4 other flags we've identified.

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.