Analyst Forecasts Just Became More Bearish On Danimer Scientific, Inc. (NYSE:DNMR)

The latest analyst coverage could presage a bad day for Danimer Scientific, Inc. (NYSE:DNMR), with the analysts 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.

Following the downgrade, the most recent consensus for Danimer Scientific from its four analysts is for revenues of US$74m in 2023 which, if met, would be a sizeable 47% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 30% to US$1.30. Yet before this consensus update, the analysts had been forecasting revenues of US$88m and losses of US$1.27 per share in 2023. 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.

Check out our latest analysis for Danimer Scientific

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Danimer Scientific's growth to accelerate, with the forecast 67% annualised growth to the end of 2023 ranking favourably alongside historical growth of 11% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.7% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Danimer Scientific to grow faster than the wider 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 Danimer Scientific. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Danimer Scientific after today.

There might be good reason for analyst bearishness towards Danimer Scientific, like a short cash runway. For more information, you can click here to discover this and the 1 other flag we've identified.

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