CymaBay Therapeutics, Inc. (NASDAQ:CBAY) Analysts Just Slashed Next Year's Revenue Estimates By 17%

Today is shaping up negative for CymaBay Therapeutics, Inc. (NASDAQ:CBAY) shareholders, with the analysts delivering a substantial negative revision to next 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. Bidders are definitely seeing a different story, with the stock price of US$32.18 reflecting a 34% rise in the past week. It will be interesting to see if the downgrade has an impact on buying demand for the company's shares.

Following the latest downgrade, the current consensus, from the ten analysts covering CymaBay Therapeutics, is for revenues of US$15m in 2024, which would reflect a sizeable 53% reduction in CymaBay Therapeutics' sales over the past 12 months. Per-share losses are expected to explode, reaching US$1.37 per share. However, before this estimates update, the consensus had been expecting revenues of US$18m and US$1.37 per share in losses. 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.

Check out our latest analysis for CymaBay Therapeutics

The consensus price target rose 8.2% to US$31.57, seeming to imply that weaker revenue sentiment is not expected to have a major impact on the company's valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the CymaBay Therapeutics' 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 45% by the end of 2024. This indicates a significant reduction from annual growth of 87% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 9.0% per year. It's pretty clear that CymaBay Therapeutics' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of CymaBay Therapeutics going forwards.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for CymaBay Therapeutics going out to 2026, and you can see them 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. 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.