Industry Analysts Just Made A Captivating Upgrade To Their Cidara Therapeutics, Inc. (NASDAQ:CDTX) Revenue Forecasts

Cidara Therapeutics, Inc. (NASDAQ:CDTX) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's forecasts. The revenue forecast for next year has experienced a facelift, with analysts now much more optimistic on its sales pipeline.

Following the latest upgrade, the current consensus, from the six analysts covering Cidara Therapeutics, is for revenues of US$17m in 2022, which would reflect a sizeable 62% reduction in Cidara Therapeutics' sales over the past 12 months. Per-share losses are expected to explode, reaching US$1.20 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$14m and losses of US$1.27 per share in 2022. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to next year's revenue estimates, while at the same time reducing their loss estimates.

See our latest analysis for Cidara Therapeutics

The consensus price target rose 7.1% to US$6.25, with the analysts encouraged by the higher revenue and lower forecast losses for next year. 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 Cidara Therapeutics, with the most bullish analyst valuing it at US$8.00 and the most bearish at US$5.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 54% by the end of 2022. This indicates a significant reduction from annual growth of 72% 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 Cidara Therapeutics' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses next year, perhaps suggesting Cidara Therapeutics is moving incrementally towards profitability. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Cidara Therapeutics.

Analysts are clearly in love with Cidara Therapeutics at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as major dilution from new stock issuance in the past year. You can learn more, and discover the 3 other flags 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 upgrading 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.