These Analysts Think Clovis Oncology, Inc.'s (NASDAQ:CLVS) Sales Are Under Threat

Today is shaping up negative for Clovis Oncology, Inc. (NASDAQ:CLVS) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

After the downgrade, the consensus from Clovis Oncology's four analysts is for revenues of US$134m in 2022, which would reflect a discernible 4.3% decline in sales compared to the last year of performance. Losses are forecast to narrow 3.0% to US$1.77 per share. However, before this estimates update, the consensus had been expecting revenues of US$155m and US$1.71 per share in losses. 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.

See our latest analysis for Clovis Oncology

The consensus price target fell 22% to US$1.75, implicitly signalling that lower earnings per share are a leading indicator for Clovis Oncology's valuation. 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. Currently, the most bullish analyst values Clovis Oncology at US$3.00 per share, while the most bearish prices it at US$1.50. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 8.4% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 22% 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 15% per year. It's pretty clear that Clovis Oncology's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Clovis Oncology. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Clovis Oncology's revenues are expected to grow slower than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Clovis Oncology going forwards.

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 Clovis Oncology's financials, such as dilutive stock issuance over the past year. Learn more, and discover the 3 other warning signs 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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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.