Analysts Just Shaved Their Amylyx Pharmaceuticals, Inc. (NASDAQ:AMLX) Forecasts Dramatically

Today is shaping up negative for Amylyx Pharmaceuticals, Inc. (NASDAQ:AMLX) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

After the downgrade, the consensus from Amylyx Pharmaceuticals' seven analysts is for revenues of US$287m in 2024, which would reflect a sizeable 25% decline in sales compared to the last year of performance. Following this this downgrade, earnings are now expected to tip over into loss-making territory, with the analysts forecasting losses of US$0.36 per share in 2024. Prior to this update, the analysts had been forecasting revenues of US$489m and earnings per share (EPS) of US$0.83 in 2024. So we can see that the consensus has become notably more bearish on Amylyx Pharmaceuticals' outlook with these numbers, making a pretty serious reduction to this year's revenue estimates. Furthermore, they expect the business to be loss-making this year, compared to their previous forecasts of a profit.

Check out our latest analysis for Amylyx Pharmaceuticals

The consensus price target fell 61% to US$14.00, implicitly signalling that lower earnings per share are a leading indicator for Amylyx Pharmaceuticals' valuation.

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. We would highlight that sales are expected to reverse, with a forecast 25% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 135% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.9% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Amylyx Pharmaceuticals is expected to lag the wider industry.

The Bottom Line

The biggest low-light for us was that the forecasts for Amylyx Pharmaceuticals dropped from profits to a loss this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Amylyx Pharmaceuticals' 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 Amylyx Pharmaceuticals.

There might be good reason for analyst bearishness towards Amylyx Pharmaceuticals, like dilutive stock issuance over the past year. Learn more, and discover the 3 other flags we've identified, for free on our platform here.

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.