Stock Analysis

Bionano Genomics, Inc. (NASDAQ:BNGO) Analysts Just Trimmed Their Revenue Forecasts By 9.0%

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Today is shaping up negative for Bionano Genomics, Inc. (NASDAQ:BNGO) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

After this downgrade, Bionano Genomics' five analysts are now forecasting revenues of US$36m in 2023. This would be a substantial 29% improvement in sales compared to the last 12 months. Losses are forecast to hold steady at around US$0.43. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$40m and losses of US$0.42 per share in 2023. So it looks like there's been a minor decline in sentiment in this consensus update, with the analysts reconfirming loss per share numbers and revising revenue downwards.

See our latest analysis for Bionano Genomics

NasdaqCM:BNGO Earnings and Revenue Growth March 13th 2023

The consensus price target fell 16% to US$5.10, with the analysts clearly concerned about the weaker revenue outlook and expectation of ongoing losses. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Bionano Genomics, with the most bullish analyst valuing it at US$7.50 and the most bearish at US$3.00 per share. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Bionano Genomics' rate of growth is expected to accelerate meaningfully, with the forecast 29% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 21% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.4% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Bionano Genomics is expected to grow much faster than its industry.

The Bottom Line

While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Bionano Genomics' future valuation. Given the stark change in sentiment, we'd understand if investors became more cautious on Bionano Genomics after today.

That said, the analysts might have good reason to be negative on Bionano Genomics, given dilutive stock issuance over the past year. Learn more, and discover the 2 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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