Analysts Have Lowered Expectations For Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT) After Its Latest Results

Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT) just released its latest yearly report and things are not looking great. Unfortunately, Arcturus Therapeutics Holdings delivered a serious earnings miss. Revenues of US$152m were 13% below expectations, and statutory losses ballooned 27% to US$3.00 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Arcturus Therapeutics Holdings

Taking into account the latest results, the current consensus, from the eleven analysts covering Arcturus Therapeutics Holdings, is for revenues of US$120.4m in 2025. This implies a sizeable 21% reduction in Arcturus Therapeutics Holdings' revenue over the past 12 months. Per-share losses are expected to explode, reaching US$4.12 per share. Before this earnings announcement, the analysts had been modelling revenues of US$205.2m and losses of US$1.85 per share in 2025. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.

The average price target was broadly unchanged at US$74.12, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Arcturus Therapeutics Holdings analyst has a price target of US$140 per share, while the most pessimistic values it at US$44.00. 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. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 21% annualised decline to the end of 2025. That is a notable change from historical growth of 50% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 20% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Arcturus Therapeutics Holdings is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for 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. The consensus price target held steady at US$74.12, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Arcturus Therapeutics Holdings. Long-term earnings power is much more important than next year's profits. We have forecasts for Arcturus Therapeutics Holdings going out to 2027, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.