Some Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT) Analysts Just Made A Major Cut To Next Year's Estimates

Today is shaping up negative for Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

After the downgrade, the consensus from Arcturus Therapeutics Holdings' nine analysts is for revenues of US$148m in 2023, which would reflect a disturbing 48% 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$1.36 per share in 2023. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$175m and losses of US$0.54 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.

View our latest analysis for Arcturus Therapeutics Holdings

Analysts lifted their price target 24% to US$60.44, implicitly signalling that lower earnings per share are not expected to have a longer-term impact on the stock's value.

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 sales are expected to reverse, with a forecast 72% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 63% 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 15% annually for the foreseeable future. It's pretty clear that Arcturus Therapeutics Holdings' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. The rising price target is a puzzle, but still - with a serious cut to this year's outlook, we wouldn't be surprised if investors were a bit wary of Arcturus Therapeutics Holdings.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Arcturus Therapeutics Holdings analysts - going out to 2025, and you can see them free 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.