Bearish: Analysts Just Cut Their Agios Pharmaceuticals, Inc. (NASDAQ:AGIO) Revenue and EPS estimates

Market forces rained on the parade of Agios Pharmaceuticals, Inc. (NASDAQ:AGIO) shareholders today, when the analysts downgraded their forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon. At US$26.51, shares are up 5.4% in the past 7 days. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

Following the downgrade, the most recent consensus for Agios Pharmaceuticals from its nine analysts is for revenues of US$43m in 2024 which, if met, would be a huge 79% increase on its sales over the past 12 months. Per-share losses are expected to explode, reaching US$5.80 per share. However, before this estimates update, the consensus had been expecting revenues of US$71m and US$5.20 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 Agios Pharmaceuticals

There was no major change to the consensus price target of US$40.83, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that Agios Pharmaceuticals' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 79% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 53% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 17% annually. So it looks like Agios Pharmaceuticals is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Agios Pharmaceuticals after the downgrade.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Agios Pharmaceuticals analysts - going out to 2026, 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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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.