Analysts Have Been Trimming Their Aclaris Therapeutics, Inc. (NASDAQ:ACRS) Price Target After Its Latest Report

Aclaris Therapeutics, Inc. (NASDAQ:ACRS) just released its latest full-year results and things are looking bullish. The results were impressive, with revenues of US$31m exceeding analyst forecasts by 70%, and statutory losses of US$1.27 were likewise much smaller than the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Aclaris Therapeutics

Taking into account the latest results, the current consensus, from the ten analysts covering Aclaris Therapeutics, is for revenues of US$7.94m in 2024. This implies a painful 75% reduction in Aclaris Therapeutics' revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 22% to US$0.98. Before this earnings announcement, the analysts had been modelling revenues of US$11.3m and losses of US$1.15 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue forecasts while also reducing the estimated losses the business will incur.

The analysts have cut their price target 9.5% to US$6.17per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses. 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. Currently, the most bullish analyst values Aclaris Therapeutics at US$28.00 per share, while the most bearish prices it at US$1.00. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 75% by the end of 2024. This indicates a significant reduction from annual growth of 44% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 9.0% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Aclaris Therapeutics is expected to lag the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Still, earnings are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Aclaris Therapeutics' future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Aclaris Therapeutics going out to 2026, and you can see them free on our platform here..

Even so, be aware that Aclaris Therapeutics is showing 5 warning signs in our investment analysis , and 1 of those can't be ignored...

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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.