News Flash: 4 Analysts Think Talis Biomedical Corporation (NASDAQ:TLIS) Earnings Are Under Threat

The analysts covering Talis Biomedical Corporation (NASDAQ:TLIS) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the downgrade, the most recent consensus for Talis Biomedical from its four analysts is for revenues of US$64m in 2021 which, if met, would be a major 267% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 90% to US$3.00. However, before this estimates update, the consensus had been expecting revenues of US$76m and US$1.74 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

View our latest analysis for Talis Biomedical

The consensus price target fell 11% to US$14.75, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Talis Biomedical, with the most bullish analyst valuing it at US$17.00 and the most bearish at US$13.00 per share. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Talis Biomedical's growth to accelerate, with the forecast 5x annualised growth to the end of 2021 ranking favourably alongside historical growth of 161% per annum over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.8% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Talis Biomedical is expected to grow much faster than its industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Talis Biomedical. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better 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 Talis Biomedical.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Talis Biomedical analysts - going out to 2024, and you can see them free on our platform here.

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 that insiders are buying.

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