Time To Worry? Analysts Just Downgraded Their Assembly Biosciences, Inc. (NASDAQ:ASMB) Outlook

The analysts covering Assembly Biosciences, Inc. (NASDAQ:ASMB) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the latest downgrade, the current consensus, from the six analysts covering Assembly Biosciences, is for revenues of US$6.6m in 2021, which would reflect a substantial 92% reduction in Assembly Biosciences' sales over the past 12 months. Per-share losses are expected to explode, reaching US$3.21 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$8.0m and losses of US$3.16 per share in 2021. 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 making no real change to the loss per share numbers.

View our latest analysis for Assembly Biosciences

The consensus price target was broadly unchanged at US$11.40, implying that the business is performing roughly in line with expectations, despite a downwards adjustment to forecast sales this year. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Assembly Biosciences analyst has a price target of US$15.00 per share, while the most pessimistic values it at US$6.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Assembly Biosciences' past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 92% by the end of 2021. This indicates a significant reduction from annual growth of 76% 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 18% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Assembly Biosciences is expected to lag the wider industry.

The Bottom Line

Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Assembly Biosciences' revenues are expected to grow slower than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Assembly Biosciences after today.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Assembly Biosciences' financials, such as dilutive stock issuance over the past year. Learn more, and discover the 3 other risks we've identified, for 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. 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.
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